WEBVTT 00:00:00.000 --> 00:00:04.980 Good morning. It is Monday, November 10th, 2025. 00:00:05.160 --> 00:00:08.160 We're here for the 830 docket and case number 00:00:08.160 --> 00:00:14.759 25 -90160. Sonoba Energy International. We'll 00:00:14.759 --> 00:00:19.980 go ahead and take appearances of counsel. Good 00:00:19.980 --> 00:00:22.039 morning, Your Honor. Can you hear me all right? 00:00:22.539 --> 00:00:25.000 I can hear you, sir. Thank you. Good morning, 00:00:25.000 --> 00:00:27.339 Your Honor. John Lozano with Bracewell LLP on 00:00:27.339 --> 00:00:29.960 behalf of the debtors. I'm joined today by my 00:00:29.960 --> 00:00:32.780 colleague Jason Cohen and by my co -counselor 00:00:32.780 --> 00:00:35.560 Kirkland Nellis, Brian Shards, Margaret Rainey, 00:00:35.759 --> 00:00:39.119 Mike Koch, and Gavin Treiber. All right, thank 00:00:39.119 --> 00:00:47.140 you. All right, who else wishes to make an appearance? 00:00:51.539 --> 00:00:58.329 Go ahead. Good morning. Can you hear me, Your 00:00:58.329 --> 00:01:01.390 Honor? I can hear you, yes, sir. Good morning. 00:01:02.009 --> 00:01:04.010 Henry Cabane with Pachowski, Stang, Zeeland, 00:01:04.250 --> 00:01:07.049 Jones for Windmar PV Energy and Windmar Home 00:01:07.049 --> 00:01:11.129 Florida, a dealer in Puerto Rico and Florida. 00:01:12.549 --> 00:01:17.950 Thank you. Good morning, Your Honor. Andrew Jimenez 00:01:17.950 --> 00:01:28.819 for the United States. Mr. Kalani, I could not 00:01:28.819 --> 00:01:36.159 hear you. Still can't hear you. Good morning, 00:01:36.299 --> 00:01:40.780 Your Honor. Sorry, good morning, Your Honor. 00:01:40.879 --> 00:01:44.700 I do a possessor for It Road, Incorporated. I've 00:01:44.700 --> 00:01:49.920 got it in there. Yes, good morning. Good morning, 00:01:49.920 --> 00:01:53.560 Your Honor. Daniel Tavol from Cobra and Kim. 00:01:53.939 --> 00:01:56.099 I'm here with my colleague, Martiz Wanderay. 00:01:56.200 --> 00:01:58.609 We represent Special Committee of the Board of 00:01:58.609 --> 00:02:02.489 Directors of Cinella Energy International. Good 00:02:02.489 --> 00:02:05.769 morning. Good morning, Your Honor. Aaron Kalodny 00:02:05.769 --> 00:02:08.069 from White and Case LLP on behalf of the Atlas 00:02:08.069 --> 00:02:09.930 Lenders. Hopefully the better. Good morning. 00:02:10.310 --> 00:02:12.750 I can hear you. I can hear you. Let me just go 00:02:12.750 --> 00:02:20.110 around. Go ahead. Good morning, Your Honor. Dennis 00:02:20.110 --> 00:02:23.069 Jenkins, Wilkie Farr Gallagher on behalf of the 00:02:23.069 --> 00:02:28.580 committee. All right. Good morning, Your Honor. 00:02:29.020 --> 00:02:31.080 Eric Doucher from North Gris. Bullbright on behalf 00:02:31.080 --> 00:02:39.340 of Sunstrong Management. Good morning. All right. 00:02:39.340 --> 00:02:51.479 Anyone else wish to make an appearance? Okay. 00:02:52.139 --> 00:02:55.360 All right. Mr. O'Donnell is going to take the 00:02:55.360 --> 00:02:58.340 lead. Morning, Your Honor. Again, for the record, 00:02:58.400 --> 00:03:01.120 John Lozano on behalf of the debtors. Mr. Sharps 00:03:01.120 --> 00:03:03.639 and his team will take the lead for us, but I'll 00:03:03.639 --> 00:03:05.360 hand that off in a moment. First, I just wanted 00:03:05.360 --> 00:03:07.800 to take an opportunity to thank the gentleman 00:03:07.800 --> 00:03:11.360 for working with us on scheduling. As always, 00:03:11.419 --> 00:03:13.400 we appreciate the court. Mr. Law is working with 00:03:13.400 --> 00:03:15.819 us, and we believe we used the time rescheduling 00:03:15.819 --> 00:03:17.879 this hand very productively. So without further 00:03:17.879 --> 00:03:19.300 comment from me, Your Honor, I'll hand it off 00:03:19.300 --> 00:03:24.599 to Mr. Sharps. All right. Thank you, sir. Morning, 00:03:24.680 --> 00:03:27.289 Your Honor. Brian Sharps. Kirkland Ellis, Council 00:03:27.289 --> 00:03:29.069 of Debtors, please let me know if you can't hear 00:03:29.069 --> 00:03:35.009 me. Okay, it's okay. I'm going to make a brief 00:03:35.009 --> 00:03:37.889 statement sort of in the form of an opening before 00:03:37.889 --> 00:03:39.909 we dive into the agenda. I do want to talk a 00:03:39.909 --> 00:03:41.909 little bit about what we've been doing since 00:03:41.909 --> 00:03:45.050 we saw you on the plan about eight weeks ago. 00:03:45.469 --> 00:03:47.949 We have a short presentation. I believe the presenter 00:03:47.949 --> 00:03:51.569 name on the photo meeting is Kirkland Ellis, 00:03:51.650 --> 00:03:53.389 New York. If you could make him a presenter, 00:03:53.569 --> 00:03:55.590 we can put that up on the screen very quickly. 00:04:03.979 --> 00:04:06.599 All right, I'm going to go ahead and activate 00:04:06.599 --> 00:04:08.319 the hand -wrenching feature because we're getting 00:04:08.319 --> 00:04:11.580 a lot of background noise. So hit five stars 00:04:11.580 --> 00:04:34.240 one time if you wish to speak. Okay, can you 00:04:34.240 --> 00:04:37.220 hear me, Judge? Again, again. Thank you so much. 00:04:37.339 --> 00:04:40.000 I think we could just go to this next slide here. 00:04:40.939 --> 00:04:43.800 Look, so after several adjournments of this hearing, 00:04:44.259 --> 00:04:47.000 for which we do thank, Your Honor, for the court, 00:04:47.519 --> 00:04:48.920 for the flexibility and patience, especially 00:04:48.920 --> 00:04:51.279 in the midst of the government shutdown, that 00:04:51.279 --> 00:04:53.779 hopefully will end soon, we're here today to 00:04:53.779 --> 00:04:55.980 seek final approval of that or disclosure statement, 00:04:56.620 --> 00:04:58.560 which the court conditionally approved on September 00:04:58.560 --> 00:05:01.540 12th, and confirmation of the plan. And Judge, 00:05:01.740 --> 00:05:04.790 I'm pleased to report... that we have used the 00:05:04.790 --> 00:05:08.509 time productively. And I believe, knock on wood, 00:05:08.649 --> 00:05:10.529 that other than with respect to the arguments 00:05:10.529 --> 00:05:13.029 that the U .S. Trustee's office previewed at 00:05:13.029 --> 00:05:16.329 the conditional DS hearing, I think we're consensually 00:05:16.329 --> 00:05:18.310 resolved on both the plan and disclosure statement. 00:05:18.810 --> 00:05:21.569 Hopefully I don't meet that pronouncement, but 00:05:21.569 --> 00:05:24.490 I think we're in very good shape. I want to talk 00:05:24.490 --> 00:05:28.889 for a moment about how we got here. And I think 00:05:28.889 --> 00:05:31.370 every good confirmation presentation starts with 00:05:31.370 --> 00:05:34.230 a timeline. Um, so that's what you have in front 00:05:34.230 --> 00:05:38.089 of you. Um, your honor, this has not been an 00:05:38.089 --> 00:05:42.569 easy process. Um, sorry, someone's calling me. 00:05:42.769 --> 00:05:44.829 This has not been easy process. We started this 00:05:44.829 --> 00:05:46.850 chapter of the cases on what I called at the 00:05:46.850 --> 00:05:50.610 time, odd footing. That was at our first, uh, 00:05:50.610 --> 00:05:52.889 day of our three day long first day hearing way 00:05:52.889 --> 00:05:54.629 back in early June. Don't think too hard about 00:05:54.629 --> 00:05:57.430 that one. Um, and we had started the cases by 00:05:57.430 --> 00:05:59.689 filing a voluntary petition for the subsidiary 00:05:59.689 --> 00:06:02.759 debtor to know the tech developer. Really, without 00:06:02.759 --> 00:06:05.420 any sort of press release, our first day papers, 00:06:05.860 --> 00:06:07.899 we did that filing to help preserve potentially 00:06:07.899 --> 00:06:11.379 valuable preference claims, but it was inauspicious 00:06:11.379 --> 00:06:15.120 beginning to be sure. Now, a week later, we filed 00:06:15.120 --> 00:06:18.439 the other three debtors along with some first 00:06:18.439 --> 00:06:21.420 day papers, but our work wasn't done. When we 00:06:21.420 --> 00:06:25.139 ultimately had our first day hearing, the debtors 00:06:25.139 --> 00:06:27.860 did not yet have a dip or a stocking horse did. 00:06:28.240 --> 00:06:30.759 Instead, the debtors had about $13 .5 million 00:06:30.759 --> 00:06:33.839 of cash on hand, that was not cash collateral, 00:06:34.279 --> 00:06:37.019 and two private sale motions to sell certain 00:06:37.019 --> 00:06:40.220 non -core assets for about $15 million each. 00:06:41.160 --> 00:06:44.779 That was progress, to be sure, but to put the 00:06:44.779 --> 00:06:47.579 situation in context, we had a company with nearly 00:06:47.579 --> 00:06:51.939 $9 billion of debt, funded debt, across the debtors 00:06:51.939 --> 00:06:54.040 and the non -debtors in the structure, and we 00:06:54.040 --> 00:06:58.810 had very little cash. I'll tell you now, it was 00:06:58.810 --> 00:07:02.449 dire. But we collectively put on a spray face. 00:07:02.970 --> 00:07:05.230 And I told you, Your Honor, at the first hearing 00:07:05.230 --> 00:07:07.610 that there would be no flashy first day presentation 00:07:07.610 --> 00:07:10.730 decks. Instead, we were going to take these cases 00:07:10.730 --> 00:07:13.810 and bite -sized pieces to do the best we can 00:07:13.810 --> 00:07:16.970 under the circumstances. That first hearing, 00:07:17.110 --> 00:07:19.750 Judge, was a long one, one I won't soon forget. 00:07:20.610 --> 00:07:22.870 You heard the evidence on one of the sale motions. 00:07:23.050 --> 00:07:25.430 And I think, if I'm reading the room correctly, 00:07:25.850 --> 00:07:27.949 somewhat reluctantly approved that first sale, 00:07:28.189 --> 00:07:30.329 understanding the situation was very neat and 00:07:30.329 --> 00:07:33.550 we needed the cash. But at the risk of being 00:07:33.550 --> 00:07:37.250 dramatic, that decision really set the stage 00:07:37.250 --> 00:07:39.889 for us to start to right -size the situation 00:07:39.889 --> 00:07:43.389 and move the debtors from odd footing to something 00:07:43.389 --> 00:07:47.129 much better. And as we moved from left to right 00:07:47.129 --> 00:07:51.670 on this timeline, things did start to come into 00:07:51.670 --> 00:07:54.500 place and we did continue to take them. in bite 00:07:54.500 --> 00:07:56.980 -sized pieces. So during the course of the rest 00:07:56.980 --> 00:07:59.579 of that week in June, the debtors were able to 00:07:59.579 --> 00:08:01.920 reach agreement on a dip from a group of bondholders. 00:08:02.120 --> 00:08:03.879 It also included a credit bid that supported 00:08:03.879 --> 00:08:08.339 sale process as a stocking horse. That dip reflected 00:08:08.339 --> 00:08:11.019 very important concessions from the dip lenders, 00:08:11.439 --> 00:08:13.519 including an agreement that the sale process 00:08:13.519 --> 00:08:17.180 would be on a rational 45 -day timeline. and 00:08:17.180 --> 00:08:20.000 that the dip collateral would exclude a pocket 00:08:20.000 --> 00:08:22.259 of valuable unencumbered assets that we refer 00:08:22.259 --> 00:08:26.899 to as the new home whip. We also reached the 00:08:26.899 --> 00:08:29.220 first of what became several agreements with 00:08:29.220 --> 00:08:34.620 Atlas, working with Mr. Kladney. He was the agent 00:08:34.620 --> 00:08:36.820 of the warehouse facility at the non -debtor 00:08:36.820 --> 00:08:39.419 entity Tepp Holdings and its subsidiaries. That 00:08:39.419 --> 00:08:41.539 was another very important step in these cases 00:08:41.539 --> 00:08:45.259 because that created a path forward to potentially 00:08:45.259 --> 00:08:49.500 and now actually unlock huge recoveries for the 00:08:49.500 --> 00:08:51.399 dealers who are owed several hundred million 00:08:51.399 --> 00:08:55.059 dollars. So I took a bit of a flyer at the end 00:08:55.059 --> 00:08:57.940 of our first day, third day of the first day 00:08:57.940 --> 00:09:01.059 hearing in June. And I said some optimistically 00:09:01.059 --> 00:09:04.840 that, you know, the company was on firm footing 00:09:04.840 --> 00:09:07.539 and the professionals all went home after that 00:09:07.539 --> 00:09:09.480 week. We had a good night's sleep and we immediately 00:09:09.480 --> 00:09:12.779 got back to work. There was so much to do and 00:09:12.779 --> 00:09:15.919 we've been really busy ever since. A few of the 00:09:15.919 --> 00:09:18.440 major items we've accomplished along the way 00:09:18.440 --> 00:09:21.720 during the intervening months. So following the 00:09:21.720 --> 00:09:25.019 appointment of the committee on June 18th, we 00:09:25.019 --> 00:09:27.419 immediately jumped into a dialogue with them 00:09:27.419 --> 00:09:30.320 about the terms of the final dip order. And as 00:09:30.320 --> 00:09:32.820 you all will remember, the final dip order had 00:09:32.820 --> 00:09:36.419 as a condition to it a release by the debtors 00:09:36.419 --> 00:09:39.700 of KKR that was needed as part of the stocking 00:09:39.700 --> 00:09:42.799 horse bid for a whole host of reasons, including 00:09:42.799 --> 00:09:46.889 tax reasons. we were able to achieve entry of 00:09:46.889 --> 00:09:50.230 the final DIP order on a consensual basis with 00:09:50.230 --> 00:09:52.450 the committee. And I think that was, looking 00:09:52.450 --> 00:09:55.250 back at it, I think it was a huge milestone and 00:09:55.250 --> 00:09:57.549 a point of optimism, at least for me, because 00:09:57.549 --> 00:10:00.389 it showed that the parties and cases had the 00:10:00.389 --> 00:10:03.909 will and the drive to be commercial and thoughtful 00:10:03.909 --> 00:10:07.250 and not spend unnecessary money on legal fees, 00:10:07.690 --> 00:10:10.149 fighting about things that we can resolve consensually. 00:10:11.250 --> 00:10:14.120 Again, after that order was entered, That set 00:10:14.120 --> 00:10:17.620 us up to have the auction for the sale which 00:10:17.620 --> 00:10:22.659 we did have. The auction began on July 23rd and 00:10:22.659 --> 00:10:26.220 the sale order was entered on July 31st. The 00:10:26.220 --> 00:10:29.000 sale ultimately closed on September 3rd following 00:10:29.000 --> 00:10:32.480 a very difficult process for approval by holders 00:10:32.480 --> 00:10:35.299 of several billion dollars of ABS debt within 00:10:35.299 --> 00:10:37.519 the asset co -structure that was being sold. 00:10:38.659 --> 00:10:41.490 The stocking horse purchaser did end up buying 00:10:41.490 --> 00:10:43.929 the assets, but only after the auction process 00:10:43.929 --> 00:10:46.590 resulted in a material increase in the value 00:10:46.590 --> 00:10:49.029 of the transaction of just under 20 million bucks. 00:10:49.629 --> 00:10:51.909 Again, we achieved agreement with the committee 00:10:51.909 --> 00:10:54.470 on the terms of the sale order. We ultimately 00:10:54.470 --> 00:10:57.649 saved approximately 400 jobs and continued service 00:10:57.649 --> 00:11:01.610 for 400 ,000 customers approximately. We could 00:11:01.610 --> 00:11:05.809 just jump down to the next slide, please. In 00:11:05.809 --> 00:11:08.850 fact, Your Honor, since the petition date We 00:11:08.850 --> 00:11:11.710 have executed on more than six transactions with 00:11:11.710 --> 00:11:14.409 various counterparties that have resulted in 00:11:14.409 --> 00:11:18.289 significant cash proceeds to the debtor. The 00:11:18.289 --> 00:11:21.990 specter of administrative solvency that perhaps 00:11:21.990 --> 00:11:24.309 has hung over these cases for at least some of 00:11:24.309 --> 00:11:27.730 the process, we can say today with confidence 00:11:27.730 --> 00:11:30.870 that the debtors are administratively solvent. 00:11:32.139 --> 00:11:34.720 And all told, since the initial petition was 00:11:34.720 --> 00:11:38.720 filed, over $100 million of incremental value 00:11:38.720 --> 00:11:41.299 has been negotiated and are monetized through 00:11:41.299 --> 00:11:43.360 the hard work of the debtor's management team, 00:11:43.960 --> 00:11:46.259 the purchaser slash gift lenders, Atlas, the 00:11:46.259 --> 00:11:48.279 UCC, their collector advisors, and I would be 00:11:48.279 --> 00:11:51.340 remiss if I didn't call especially Mr. Alejandro, 00:11:51.460 --> 00:11:54.279 the debtor's CRO, who has worked relentlessly 00:11:54.279 --> 00:11:56.799 tirelessly to maximize the value for these states. 00:11:57.759 --> 00:11:59.399 Judge, this is all stuff you've been sort of 00:11:59.399 --> 00:12:02.039 privy to. Quick summation of how we got here. 00:12:02.360 --> 00:12:04.620 I want to talk a little bit about what has happened 00:12:04.620 --> 00:12:07.100 since your honor conditionally approved the disclosure 00:12:07.100 --> 00:12:09.360 statement on September 12th. More than eight 00:12:09.360 --> 00:12:11.940 weeks ago, I'm almost embarrassed to say. I'm 00:12:11.940 --> 00:12:15.120 sure you've wondered a little bit what's going 00:12:15.120 --> 00:12:17.620 on behind the scenes, and I want to give you 00:12:17.620 --> 00:12:20.240 a little bit of a peek of how we've used that 00:12:20.240 --> 00:12:24.679 time. Let's start with the committee judge, represented 00:12:24.679 --> 00:12:27.460 by the advisors of Wilkie and Blank Rahm and 00:12:27.460 --> 00:12:31.500 BRG. You may remember, Your Honor, at the conditional 00:12:31.500 --> 00:12:33.620 disclosure statement we heard a bit from Mr. 00:12:33.820 --> 00:12:35.600 Jenkins and Wilking that half the committee has 00:12:35.600 --> 00:12:38.700 said, and I'm paraphrasing here, that the committee 00:12:38.700 --> 00:12:41.100 was not happy and that there is a lot that needed 00:12:41.100 --> 00:12:44.860 to be done if we were ever going to have a consensual 00:12:44.860 --> 00:12:47.059 confirmation even once a farce to say that Your 00:12:47.059 --> 00:12:49.159 Honor should expect objections, discovery spikes, 00:12:49.879 --> 00:12:52.460 and depositions. It was a shot across the bow 00:12:52.460 --> 00:12:55.940 to be sure. Now I have a lot of professional 00:12:55.940 --> 00:12:58.299 respect for Mr. Jenkins, so it was a hard speech 00:12:58.299 --> 00:13:01.519 to hear that day. We had come so far in these 00:13:01.519 --> 00:13:04.200 cases, but it was clear that we had so much that 00:13:04.200 --> 00:13:06.620 we had to do to finish these cases efficiently 00:13:06.620 --> 00:13:09.980 and effectively. We on the debtor side took Mr. 00:13:10.120 --> 00:13:13.100 Jenkins' comments and shot across the bow, not 00:13:13.100 --> 00:13:15.419 as a declaration of war, but rather an invitation 00:13:15.419 --> 00:13:17.799 to see if we can work that much harder to find 00:13:17.799 --> 00:13:19.740 peace, and that's what we did for the last eight 00:13:19.740 --> 00:13:22.600 weeks. Your Honor probably always hears the phrase 00:13:22.600 --> 00:13:24.840 hard fought negotiations all the time. Everyone 00:13:24.840 --> 00:13:27.000 throws it out in all the papers. Let me tell 00:13:27.000 --> 00:13:29.399 you, that phrase is an understatement here when 00:13:29.399 --> 00:13:32.000 it comes to the plan that we are seeking to confirm 00:13:32.000 --> 00:13:35.960 today. Finding a way to peace and resolution 00:13:35.960 --> 00:13:40.720 required every party to stick with it and not 00:13:40.720 --> 00:13:43.960 let discussions become overly emotional or descend 00:13:43.960 --> 00:13:47.120 into chaos and the level of professionalism that 00:13:47.360 --> 00:13:50.639 parties carried out here is very extraordinary, 00:13:51.080 --> 00:13:54.200 and we thank everyone for participating in it 00:13:54.200 --> 00:13:57.519 the way they did. I frankly wasn't sure at times 00:13:57.519 --> 00:14:00.440 that we would get there, especially on very difficult 00:14:00.440 --> 00:14:02.519 questions about the appropriateness of things 00:14:02.519 --> 00:14:05.120 like releases and the formation of the credit 00:14:05.120 --> 00:14:08.120 trust and what would go in the trust, but we 00:14:08.120 --> 00:14:10.899 did. It took us eight weeks. Frankly, it took 00:14:10.899 --> 00:14:12.740 us more than eight weeks because we started before 00:14:12.740 --> 00:14:16.509 the DS, but we did it. And I applaud everyone 00:14:16.509 --> 00:14:18.950 for sticking with it, not just with Kirkland 00:14:18.950 --> 00:14:22.690 and Ellis, and working with A &M and Kirkland, 00:14:22.730 --> 00:14:24.730 but working with the advisors at Cobra and Kin 00:14:24.730 --> 00:14:26.590 and Providence, who represent the Special Committee 00:14:26.590 --> 00:14:29.309 of Two Interested Directors, Mr. Tony Horton 00:14:29.309 --> 00:14:35.049 and Mr. Jeff Stein. I believe that there is a 00:14:35.049 --> 00:14:36.850 world where lesser professionals would have spent 00:14:36.850 --> 00:14:39.429 a lot of unnecessary time and money in these 00:14:39.429 --> 00:14:41.870 cases on litigation, and that credit or credit 00:14:41.870 --> 00:14:44.279 recoveries would have been... all the worse for 00:14:44.279 --> 00:14:46.960 it. That's not where we're at. We're here on 00:14:46.960 --> 00:14:49.100 a largely consensual basis, not fully consensual 00:14:49.100 --> 00:14:51.659 basis other than with the U .S. trustee, and 00:14:51.659 --> 00:14:54.840 people have worked really hard to get there since 00:14:54.840 --> 00:14:57.440 September 12th. I also want to talk a little 00:14:57.440 --> 00:15:00.139 bit, Your Honor, about the purchaser under the 00:15:00.139 --> 00:15:02.620 whole cost sale, who works with Paul Weiss, Norton 00:15:02.620 --> 00:15:06.200 Rosen, Evercourt. As I mentioned, we came to 00:15:06.200 --> 00:15:08.519 these cases with a very complex, large capital 00:15:08.519 --> 00:15:12.519 structure, and doing a sale around that structure 00:15:12.519 --> 00:15:16.360 was not easy, very complicated. We all were moving 00:15:16.360 --> 00:15:18.340 very quickly, and while we did our collective 00:15:18.340 --> 00:15:21.240 best to dot every I and cross every T with respect 00:15:21.240 --> 00:15:24.639 to the Hoco sale, it probably was inevitable 00:15:24.639 --> 00:15:28.259 that at some point there would be a dispute about 00:15:28.259 --> 00:15:31.019 the sale once the sale closed. That's exactly 00:15:31.019 --> 00:15:32.940 what happened, and Your Honor has seen this time 00:15:32.940 --> 00:15:35.159 and time again. I'm sure the dispute was pretty 00:15:35.159 --> 00:15:37.200 simple. The purchaser had a view about what the 00:15:37.200 --> 00:15:38.879 debtors owed it, and the debtors had a view about 00:15:38.879 --> 00:15:40.980 what the purchaser owed them, and they weren't 00:15:40.980 --> 00:15:44.169 the same. It's a story you've probably heard 00:15:44.169 --> 00:15:48.570 a lot. That dispute itself could have devolved 00:15:48.570 --> 00:15:52.309 into, frankly, complete chaos, resulting in motion 00:15:52.309 --> 00:15:54.870 practice, discovery, and at least one adversary 00:15:54.870 --> 00:15:58.070 proceeding was threatened. But again, all of 00:15:58.070 --> 00:16:00.110 the principles and professionals approached the 00:16:00.110 --> 00:16:03.529 dispute in a patient and rational manner, and 00:16:03.529 --> 00:16:05.889 that resulted in a comprehensive resolution that 00:16:05.889 --> 00:16:08.350 is now built into the plan and which will bring 00:16:08.350 --> 00:16:12.870 in an incremental 8. $8 ,376 ,000 into the debtors 00:16:12.870 --> 00:16:15.190 of state. So it's a net positive to the debtors 00:16:15.190 --> 00:16:17.549 without having to spend incremental professional 00:16:17.549 --> 00:16:20.029 fees getting to the right answer. So we think 00:16:20.029 --> 00:16:22.509 the professionals and the principals involved 00:16:22.509 --> 00:16:25.509 for getting to the right answer there. And we'll 00:16:25.509 --> 00:16:27.149 talk a little bit more about that as we get into 00:16:27.149 --> 00:16:31.350 the plan, but that's a second area that's been 00:16:31.350 --> 00:16:36.250 hotly contested. The third vertical judge is 00:16:36.250 --> 00:16:40.799 within Atlas. the non -debtor entities that are 00:16:40.799 --> 00:16:43.940 obligated on the warehouse facility. You've heard 00:16:43.940 --> 00:16:46.080 a little bit from Alice's counsel, from my case 00:16:46.080 --> 00:16:48.960 throughout the cases, and their financial advisor 00:16:48.960 --> 00:16:51.600 from Alex's partners, also leading the team, 00:16:51.600 --> 00:16:53.639 the charge of the team from McDermott, Will and 00:16:53.639 --> 00:16:55.340 Sholte, that you haven't heard from as much, 00:16:55.620 --> 00:16:57.700 but has been extremely helpful that represents 00:16:57.700 --> 00:17:00.500 the board at the non -debtor entity TEP Holdings. 00:17:01.039 --> 00:17:03.379 It is a very complicated relationship between 00:17:03.379 --> 00:17:06.299 the debtors and the non -debtors, but the punchline 00:17:06.299 --> 00:17:09.509 here is that the various sale and settlement 00:17:09.509 --> 00:17:12.650 agreements that we've reached with TEP -H, TEP 00:17:12.650 --> 00:17:15.029 Holdings, TEP -H, which is what we call it, ultimately 00:17:15.029 --> 00:17:17.849 unlocked hundreds of millions of dollars for 00:17:17.849 --> 00:17:20.829 over 100 dealer settlements and a path to a significant 00:17:20.829 --> 00:17:24.910 recovery for the TEP -H warehouse lenders. We've 00:17:24.910 --> 00:17:27.990 also had a very consensual governance process 00:17:27.990 --> 00:17:31.970 within TEP -H with Ms. Nanoukian's help. Achieving 00:17:31.970 --> 00:17:34.569 peaceful resolution on the plan also required 00:17:34.940 --> 00:17:36.980 that we find agreement with those professionals 00:17:36.980 --> 00:17:38.720 because they had their own comments on the plan, 00:17:38.859 --> 00:17:41.339 too. So we had to bring them into the fold and 00:17:41.339 --> 00:17:42.880 make sure they were comfortable with what we 00:17:42.880 --> 00:17:45.779 were doing. Of course, there have been one -off 00:17:45.779 --> 00:17:48.559 issues, some of which are very important, like 00:17:48.559 --> 00:17:51.019 the issues with the Department of Energy, that 00:17:51.019 --> 00:17:52.700 we've been able to address over the course of 00:17:52.700 --> 00:17:54.019 the last eight weeks and which are reflected 00:17:54.019 --> 00:17:56.630 in the plan and proposed order. But it's been 00:17:56.630 --> 00:17:59.150 a very busy stretch, Your Honor. I apologize 00:17:59.150 --> 00:18:01.710 for not having given an update on where we are. 00:18:02.430 --> 00:18:04.009 But frankly, we weren't sure it was going to 00:18:04.009 --> 00:18:08.309 come together. But it did. And you now have a 00:18:08.309 --> 00:18:11.269 sense of what we've been up to. It's been a long, 00:18:11.549 --> 00:18:14.529 hard road. But I strongly believe that we, the 00:18:14.529 --> 00:18:17.890 royal we on this call, folks, have really done 00:18:17.890 --> 00:18:21.650 all we could have done to maximize the value 00:18:21.650 --> 00:18:24.319 of the debtors of states. And I say that with 00:18:24.319 --> 00:18:27.539 the most confidence I've ever had since I've 00:18:27.539 --> 00:18:30.240 been working on these cases, that the company 00:18:30.240 --> 00:18:33.319 is not just on firm footing at this point, but 00:18:33.319 --> 00:18:36.720 the plan that we're going to ask Your Honor to 00:18:36.720 --> 00:18:40.099 confirm today will put the debtors on the absolute 00:18:40.099 --> 00:18:42.960 best footing they could have been on, especially 00:18:42.960 --> 00:18:45.559 in light of the circumstances that led to the 00:18:45.559 --> 00:18:47.980 cases. So with that, Your Honor, I'm happy to 00:18:47.980 --> 00:18:50.019 answer any questions you may have or otherwise. 00:18:50.269 --> 00:18:52.230 see the podium to any other party that wishes 00:18:52.230 --> 00:18:55.289 to make a statement. Once that's done, we're 00:18:55.289 --> 00:18:57.089 going to move to our evidence and presentation 00:18:57.089 --> 00:18:59.970 in support of the disclosure statement that's 00:18:59.970 --> 00:19:02.950 going to be led by Miss Rainey with support from 00:19:02.950 --> 00:19:06.490 our colleague, Mr. Mike Cuddle. All right. Does 00:19:06.490 --> 00:19:08.950 anyone wish to make, thank you, Mr. Sheriff. 00:19:09.069 --> 00:19:12.569 Does anyone wish to make brief remarks by way 00:19:12.569 --> 00:19:21.119 of opening? Go ahead, Mr. Jenkins. I don't think 00:19:21.119 --> 00:19:41.980 you have to hit five star. Anyone who wishes 00:19:41.980 --> 00:19:45.640 to hit five star, I still haven't seen you, Mr. 00:19:45.859 --> 00:20:49.119 Jenkins. No, just pick five star one time. Conference 00:20:49.119 --> 00:21:21.390 un -muted. Let me mute this and then hit five 00:21:21.390 --> 00:22:41.039 stars. Conference un -muted. Just go ahead and 00:22:41.039 --> 00:22:43.740 Mr. Jenkins will un -mute it after you speak. 00:22:44.519 --> 00:22:47.099 Yeah, I'm sorry. I said my hand was raised. I 00:22:47.099 --> 00:22:49.519 apologize. Not sure what I'm doing wrong here. 00:22:50.259 --> 00:22:53.180 But I want to thank Mr. Schartz for his preview 00:22:53.180 --> 00:22:56.579 and also just give you a quick update on where 00:22:56.579 --> 00:23:00.799 the committee is. As Mr. Schartz pointed out, 00:23:01.359 --> 00:23:03.559 there was real risk of administrative insolvency 00:23:03.559 --> 00:23:06.460 here. And as a committee, we wanted to be very 00:23:06.460 --> 00:23:09.319 sure that we took the right approach to maximizing 00:23:09.319 --> 00:23:13.859 value and which took a careful balance constantly 00:23:13.859 --> 00:23:16.680 to make sure that we were making the right decision, 00:23:17.099 --> 00:23:20.440 both from how fees would be spent in this case 00:23:20.440 --> 00:23:24.720 and how we would ultimately maximize value. And 00:23:24.720 --> 00:23:26.619 as Mr. Sharps pointed out, this case started 00:23:26.619 --> 00:23:29.960 out with a number of emergency hearings and eventually 00:23:29.960 --> 00:23:33.000 the sale of substantially all the assets. And 00:23:33.000 --> 00:23:35.220 it became clear through time that really the 00:23:35.220 --> 00:23:38.480 only value for general unsecured creditors would 00:23:38.480 --> 00:23:42.440 come down to causes of action. And as Mr. Sharpe 00:23:42.440 --> 00:23:45.539 pointed out, through really hard -fought negotiations, 00:23:46.059 --> 00:23:49.720 we did come to a place on the plan that turns 00:23:49.720 --> 00:23:54.279 over that value to the general unsecured creditors, 00:23:54.339 --> 00:23:56.859 both in terms of the ability to control that 00:23:56.859 --> 00:24:00.279 destiny and how that pursuit occurs. And as I'm 00:24:00.279 --> 00:24:04.319 sure will be pointed out, That plan now provides 00:24:04.319 --> 00:24:08.680 a liquidating trust. The general unsecured creditors 00:24:08.680 --> 00:24:11.240 through the UCC have selected a trustee who will 00:24:11.240 --> 00:24:14.119 oversee that trust. And there's an oversight 00:24:14.119 --> 00:24:17.420 board with four general unsecured creditors selected 00:24:17.420 --> 00:24:21.279 by the UCC who will now take over the reins, 00:24:21.279 --> 00:24:25.400 so to speak, of maximizing the value of those 00:24:25.400 --> 00:24:30.420 remaining assets. Equally important is that This 00:24:30.420 --> 00:24:33.059 plan and the disclosure statement now projects 00:24:33.059 --> 00:24:35.339 that we will have sufficient money not only to 00:24:35.339 --> 00:24:38.680 wind down the debtor estates, but also fund the 00:24:38.680 --> 00:24:41.859 start of the pursuit of those causes of action, 00:24:41.940 --> 00:24:44.619 both in terms of investigation and where necessary 00:24:44.619 --> 00:24:48.299 litigation. And I want to point out also that 00:24:48.299 --> 00:24:50.480 through the creditor trust agreement, while we 00:24:50.480 --> 00:24:53.119 think we may have enough money to start that 00:24:53.119 --> 00:24:56.779 process, it's your honor knows not always clear 00:24:56.779 --> 00:24:59.890 at the beginning where that may go. But the creditor 00:24:59.890 --> 00:25:02.170 trust agreement that we've agreed upon and that's 00:25:02.170 --> 00:25:05.089 in the plan supplement will also get the creditor 00:25:05.089 --> 00:25:08.849 trustee with the consent of the oversight board, 00:25:09.369 --> 00:25:12.009 the ability to obtain litigation financing if 00:25:12.009 --> 00:25:14.730 needed, which could include loans, contingency 00:25:14.730 --> 00:25:18.769 arrangements, and insurance. So we will have 00:25:18.769 --> 00:25:21.710 the resources, general insecure creditors will 00:25:21.710 --> 00:25:24.609 have the resources to pursue those causes of 00:25:24.609 --> 00:25:31.029 action one way or another. came in part as well, 00:25:31.089 --> 00:25:33.410 as Mr. Schartz pointed out, fighting to limit 00:25:33.410 --> 00:25:36.490 the scope of the releases, which took, you know, 00:25:37.029 --> 00:25:40.490 a lot of effort. But we got comfortable, one, 00:25:40.750 --> 00:25:43.170 as you would expect, that there's no release 00:25:43.170 --> 00:25:45.869 of fraud, gross negligence, and willful misconduct. 00:25:46.029 --> 00:25:50.369 But further, we've now retained avoidance actions 00:25:50.369 --> 00:25:53.369 and causes of action against virtually all the 00:25:53.369 --> 00:25:56.369 pre -petitions. officers, directors, advisors, 00:25:56.630 --> 00:26:00.029 third parties with only very minor exceptions 00:26:00.029 --> 00:26:04.170 so that the full scope of what happened here 00:26:04.170 --> 00:26:07.869 can be investigated and pursued and, if necessary, 00:26:08.089 --> 00:26:10.990 litigated to maximize value. And that includes 00:26:10.990 --> 00:26:14.589 also through the retention of insurance policies. 00:26:14.690 --> 00:26:17.670 So a lot of work went into making sure that this 00:26:17.670 --> 00:26:21.349 liquidating trust would have access to pursue 00:26:22.140 --> 00:26:24.700 causes of action standing to pursue those and 00:26:24.700 --> 00:26:29.900 also reach to insurance. And lastly, I would 00:26:29.900 --> 00:26:33.440 say we also work to make sure for third party 00:26:33.440 --> 00:26:36.400 releases that there will be an extension of time 00:26:36.400 --> 00:26:40.119 for creditors out there who didn't yet have the 00:26:40.119 --> 00:26:42.099 chance to opt out. They will have, I believe, 00:26:42.380 --> 00:26:45.539 to December 10th an additional notice time to 00:26:45.539 --> 00:26:49.569 opt out of those releases. So there will be additional 00:26:49.569 --> 00:26:54.869 time and additional notice for those creditors 00:26:54.869 --> 00:26:59.170 to take a look at that and opt out. So in the 00:26:59.170 --> 00:27:02.049 end, Your Honor, while I can't say we've made 00:27:02.049 --> 00:27:04.630 lemonade out of lemons here, at least the lemons 00:27:04.630 --> 00:27:08.730 are being turned over to a trust and we'll be 00:27:08.730 --> 00:27:11.390 able to pursue the remaining causes of action. 00:27:11.990 --> 00:27:15.089 in a way that makes sense from the committee's 00:27:15.089 --> 00:27:16.890 standpoint and hopefully from the general and 00:27:16.890 --> 00:27:19.470 all general and secured creditors. And I will 00:27:19.470 --> 00:27:23.769 just add that it did take a lot of work with 00:27:23.769 --> 00:27:27.349 a lot of professionals focusing on being professional, 00:27:27.509 --> 00:27:30.650 focused on pushing and fighting where necessary, 00:27:31.230 --> 00:27:33.970 but not fighting where it was unnecessary. And 00:27:33.970 --> 00:27:36.430 I thank everyone for their work on that and for 00:27:36.430 --> 00:27:40.779 your attention to this, Judge. Thank you. Does 00:27:40.779 --> 00:27:43.019 anyone else wish to be heard by way and make 00:27:43.019 --> 00:27:49.559 sure of an opening statement? All right, Mr. 00:27:50.119 --> 00:27:53.019 Sharps. OK, I'm actually going to take it to 00:27:53.019 --> 00:27:56.839 Miss Rainey in New York, who's going to present 00:27:56.839 --> 00:27:59.220 the case in chief. So Miss Rainey, take it away. 00:28:02.200 --> 00:28:04.640 Good morning, Your Honor. Can you hear me? I 00:28:04.640 --> 00:28:08.880 can hear you. OK, great. Margaret Rainey of Kirkland 00:28:08.880 --> 00:28:12.119 & Ellis, Council for the Debtors. As Mr. Schartz 00:28:12.119 --> 00:28:14.920 mentioned, we're thrilled to be here today seeking 00:28:14.920 --> 00:28:17.359 final approval of the disclosure statement and 00:28:17.359 --> 00:28:20.900 confirmation of the plan. At the outset, I would 00:28:20.900 --> 00:28:22.920 like to start with a summary of the evidence 00:28:22.920 --> 00:28:25.660 in support of confirmation today and the omission 00:28:25.660 --> 00:28:28.940 of the documents embodying the evidence. Your 00:28:28.940 --> 00:28:30.880 Honor, we submitted and filed with the court 00:28:30.880 --> 00:28:33.720 a number of declarations in support of confirmation. 00:28:34.460 --> 00:28:37.279 The first, is that of the chief restructuring 00:28:37.279 --> 00:28:41.180 officer, Mr. Ryan Omohundro, filed at docket 00:28:41.180 --> 00:28:46.099 number 1179. Mr. Omohundro's declaration addresses 00:28:46.099 --> 00:28:49.740 the 1129 factors, as well as evidence in support 00:28:49.740 --> 00:28:53.859 of the releases. The second declaration is that 00:28:53.859 --> 00:28:56.980 of Mr. Jeffrey Stein, a disinterested director 00:28:56.980 --> 00:28:59.460 on the debtor's board, having served since April 00:28:59.460 --> 00:29:02.740 of this year. His declaration is at docket number 00:29:02.740 --> 00:29:05.920 1180. and addresses the special committee of 00:29:05.920 --> 00:29:09.500 the board's investigation. Finally, we have the 00:29:09.500 --> 00:29:12.799 declaration of Mr. Alex Orchowsky from Kroll, 00:29:12.940 --> 00:29:15.380 the debtor's commission noticing agent. That 00:29:15.380 --> 00:29:18.839 was filed at docket number 1182 and outlines 00:29:18.839 --> 00:29:22.240 the voting and solicitation process. Your Honor, 00:29:22.319 --> 00:29:25.720 all of these declarants are present via Zoom 00:29:25.720 --> 00:29:28.099 today, and I would ask that the outset of these 00:29:28.099 --> 00:29:31.619 declarations be admitted as the declarant's direct 00:29:31.619 --> 00:29:35.349 testimony and support confirmation. All right, 00:29:35.349 --> 00:29:37.670 let's take them one at a time. So with respect 00:29:37.670 --> 00:29:41.150 to Mr. Alejandro's declaration at docket number 00:29:41.150 --> 00:29:47.390 1179, does anyone oppose the admission of Mr. 00:29:47.769 --> 00:29:50.710 Alejandro's declaration as his direct testimony 00:29:50.710 --> 00:29:52.769 in connection with this case subject to cross 00:29:52.769 --> 00:29:57.289 -examination? All right, hearing no objection, 00:29:57.369 --> 00:30:00.150 they will be admitted. I do have one question. 00:30:00.829 --> 00:30:02.650 So Mr. Alejandro, would you raise your right 00:30:02.650 --> 00:30:05.759 hand, please? Do you solemnly swear or affirm 00:30:05.759 --> 00:30:07.700 to tell the truth, the whole truth and nothing 00:30:07.700 --> 00:30:12.059 but the truth? I do. All right. My only question 00:30:12.059 --> 00:30:16.420 is, your declaration had a conversion date of 00:30:16.420 --> 00:30:20.720 October 17th. We're almost a month later. With 00:30:20.720 --> 00:30:23.779 respect to the liquidation analysis, would your 00:30:23.779 --> 00:30:26.440 testimony be the same as the conversion date 00:30:26.440 --> 00:30:31.119 for today as opposed to October 17th? It would. 00:30:31.940 --> 00:30:34.299 All right. I have nothing further. Has anyone 00:30:34.299 --> 00:30:37.400 wished to cross -examine? I'm sorry. Thank you, 00:30:37.440 --> 00:30:39.960 Mr. Alejandro. Your declaration was admitted. 00:30:40.700 --> 00:30:43.579 Next is the declaration of Mr. Stein as docket 00:30:43.579 --> 00:30:47.299 number 1180. Does anyone object to the admission 00:30:47.299 --> 00:30:50.940 of the declaration of Mr. Stein as his direct 00:30:50.940 --> 00:30:54.059 testimony for purposes of this hearing subject 00:30:54.059 --> 00:30:57.940 to cross -examination? I hear no objection. That 00:30:57.940 --> 00:31:01.089 will be admitted. And finally, we have the declaration 00:31:01.089 --> 00:31:05.410 of Mr. Oshosky at docket number 1182. Does anyone 00:31:05.410 --> 00:31:07.789 object to the admission of the declaration of 00:31:07.789 --> 00:31:11.269 Mr. Oshosky as his direct testimony in connection 00:31:11.269 --> 00:31:13.809 with this hearing subject to policy examination? 00:31:14.950 --> 00:31:18.930 Okay, here no objection. His declaration at docket 00:31:18.930 --> 00:31:22.950 1182 will be admitted. Go ahead, Ms. Ray. Great, 00:31:22.990 --> 00:31:26.529 thank you. Thank you, Your Honor. Your Honor... 00:31:26.539 --> 00:31:28.839 The debtors assert that the disclosure statement 00:31:28.839 --> 00:31:31.880 contains adequate information as presented in 00:31:31.880 --> 00:31:34.640 the confirmation brief and no party has asserted 00:31:34.640 --> 00:31:37.380 otherwise. The debtors have complied with the 00:31:37.380 --> 00:31:40.359 applicable solicitation requirements set place 00:31:40.359 --> 00:31:42.799 in the conditional disclosure statement order 00:31:42.799 --> 00:31:46.319 and required under Section 1125 of the bankruptcy 00:31:46.319 --> 00:31:50.079 code. Kroll, the debtor's claims and noticing 00:31:50.079 --> 00:31:53.240 agent, sent out approximately 8 ,000 solicitation 00:31:53.240 --> 00:31:56.690 packages to the voting classes. and approximately 00:31:56.690 --> 00:32:02.190 37 ,500 non -voting notices to other claimholders. 00:32:03.289 --> 00:32:05.410 Further, the debtors submit that all parties 00:32:05.410 --> 00:32:08.589 were provided ample notice to return such materials. 00:32:09.549 --> 00:32:11.930 When there was a question as to whether the debtors 00:32:11.930 --> 00:32:15.509 had met the required voting threshold, the debtors 00:32:15.509 --> 00:32:18.130 extended voting deadlines for classes three and 00:32:18.130 --> 00:32:21.430 five and utilized the flexibility afforded by 00:32:21.430 --> 00:32:24.200 the solicitation procedures. to allow parties 00:32:24.200 --> 00:32:27.279 to change their votes as necessary to achieve 00:32:27.279 --> 00:32:29.960 the consensus reflected in the voting report. 00:32:31.420 --> 00:32:33.279 Your Honor, we believe that the process worked 00:32:33.279 --> 00:32:36.299 as it should have, in no small part due to Your 00:32:36.299 --> 00:32:38.140 Honor's approval of the conditional disclosure 00:32:38.140 --> 00:32:41.740 statement order and the efforts of CROHL. Accordingly, 00:32:42.460 --> 00:32:45.119 unless Your Honor has any questions regarding 00:32:45.119 --> 00:32:47.940 the disclosure statement, the debtors respectfully 00:32:47.940 --> 00:32:49.799 request that the court approve the disclosure 00:32:49.799 --> 00:32:52.509 statement on a final basis at the conclusion 00:32:52.509 --> 00:32:55.670 of the hearing. All right, let me just let's 00:32:55.670 --> 00:32:59.450 take that piece right now. Does anyone wish to 00:32:59.450 --> 00:33:02.869 be heard with respect to the final approval of 00:33:02.869 --> 00:33:10.309 the disclosure statement? All right, thank you. 00:33:10.750 --> 00:33:13.450 Yes, I'm sorry, Your Honor. Andrew Heman for 00:33:13.450 --> 00:33:17.490 the United States. I guess my only remark will 00:33:17.490 --> 00:33:20.809 be also in connection with confirmation of the 00:33:20.809 --> 00:33:24.710 plan. as the U .S. trustee objected earlier in 00:33:24.710 --> 00:33:27.769 this case, Your Honor, to the opt -out mechanism 00:33:27.769 --> 00:33:30.769 with the understanding that the opt -out mechanism 00:33:30.769 --> 00:33:32.970 was not appropriate in this case because you 00:33:32.970 --> 00:33:37.470 don't get the appropriate consent from creditors. 00:33:37.750 --> 00:33:41.250 So in that respect, which connects to confirmation 00:33:41.250 --> 00:33:45.609 of the plan, I just want to raise that issue, 00:33:45.609 --> 00:33:51.119 Your Honor, so that it's not... forgotten or 00:33:51.119 --> 00:33:54.839 considered as waiving that right as it relates 00:33:54.839 --> 00:33:58.740 to the disclosure statement, but I think it's 00:33:58.740 --> 00:34:03.200 more, it fits more appropriately with confirmation 00:34:03.200 --> 00:34:06.000 of the plan. All right. All right. Thank you. 00:34:06.039 --> 00:34:09.159 That'll be noted. All right. Go ahead, Ms. Rainey. 00:34:09.659 --> 00:34:13.139 Thank you, Your Honor. Next is the plan. I will 00:34:13.139 --> 00:34:16.079 spare the court a lengthy recitation and discussion 00:34:16.079 --> 00:34:19.619 of each of the 1129 factors. none of which I 00:34:19.619 --> 00:34:21.920 believe are in dispute today. I would just note 00:34:21.920 --> 00:34:24.480 that these factors are addressed in detail in 00:34:24.480 --> 00:34:27.760 Mr. O'Mahondra's declaration and in our confirmation 00:34:27.760 --> 00:34:31.900 brief. I will focus my presentation on the revisions 00:34:31.900 --> 00:34:34.280 that we have made to the plan since solicitation 00:34:34.280 --> 00:34:38.659 and the objection. As Your Honor saw, we made 00:34:38.659 --> 00:34:41.000 a number of revisions to the plan, all of which 00:34:41.000 --> 00:34:44.139 we believe are technical modifications that do 00:34:44.139 --> 00:34:47.480 not give rise to re -solicitation. My colleague, 00:34:47.639 --> 00:34:50.019 Mike Ko, will walk your honor through the confirmation 00:34:50.019 --> 00:34:52.900 order in detail, but at a high level, we made 00:34:52.900 --> 00:34:56.579 the following changes. We disclosed the identity 00:34:56.579 --> 00:34:59.179 of the creditor trustee and the initial members 00:34:59.179 --> 00:35:02.739 of the creditor trust oversight board. We made 00:35:02.739 --> 00:35:05.699 several changes to clarify that causes of action 00:35:05.699 --> 00:35:08.420 vesting in the creditor trust will not include 00:35:08.420 --> 00:35:12.420 any released claims. We added the purchaser settlement 00:35:12.639 --> 00:35:15.719 which as Mr. Schartz noted, brings an incremental 00:35:15.719 --> 00:35:21.539 $8 .376 million into the debtor's estate. We 00:35:21.539 --> 00:35:23.980 clarified the scope of the debtor release and 00:35:23.980 --> 00:35:26.539 third party release, as well as the definitions 00:35:26.539 --> 00:35:30.239 as the release and releasing parties. Your Honor, 00:35:30.380 --> 00:35:32.679 as Mr. Schartz mentioned, these changes were 00:35:32.679 --> 00:35:35.699 heavily negotiated with the committee, advisors 00:35:35.699 --> 00:35:38.679 to the special committee, the DIP ad hoc group, 00:35:39.039 --> 00:35:41.019 and several other of the debtor's stakeholders. 00:35:41.440 --> 00:35:43.980 and was scrutinized very closely given that this 00:35:43.980 --> 00:35:46.880 is a liquidating plan and there will be no discharge 00:35:46.880 --> 00:35:50.900 in these cases. The definitions of released and 00:35:50.900 --> 00:35:54.219 releasing parties as revised are narrowly tailored 00:35:54.219 --> 00:35:56.880 to capture those who contributed significant 00:35:56.880 --> 00:35:59.559 value to the debtors of state in these Chapter 00:35:59.559 --> 00:36:02.880 11 cases and the scope of released parties was 00:36:02.880 --> 00:36:05.599 informed by and is consistent with the results 00:36:05.599 --> 00:36:08.340 of the independent special committee investigation. 00:36:09.079 --> 00:36:13.710 I have a question there though. I believe, if 00:36:13.710 --> 00:36:16.190 I read correctly, that the debtor is a released 00:36:16.190 --> 00:36:19.289 party. I don't understand how the debtor can 00:36:19.289 --> 00:36:24.230 be a released party. Your Honor, the debtor is 00:36:24.230 --> 00:36:28.429 a released party in that we took the temporal 00:36:28.429 --> 00:36:31.750 limitation that Your Honor noted at the disclosure 00:36:31.750 --> 00:36:34.289 statement hearing, and it's only being released 00:36:34.289 --> 00:36:37.210 for the period between the petition date and 00:36:37.210 --> 00:36:43.599 the effective date. If that's the case I missed 00:36:43.599 --> 00:36:48.960 it but what where is that in the plan? Your honor 00:36:48.960 --> 00:37:17.619 I'm looking at Article 8 of the plan, Section 00:37:17.619 --> 00:37:32.000 C. So, towards the bottom of that paragraph, 00:37:32.300 --> 00:37:35.900 it notes the confirmation order shall only release 00:37:35.900 --> 00:37:38.340 claims and causes of action against the debtors 00:37:38.639 --> 00:37:41.519 and their related parties solely to the extent 00:37:41.519 --> 00:37:45.219 the claims arise from the period between the 00:37:45.219 --> 00:37:47.760 petition date and ending on the effective date. 00:37:52.059 --> 00:37:59.320 There is a limited carve -out there for the release 00:37:59.320 --> 00:38:02.739 directors and officers and the debtors professional. 00:38:04.730 --> 00:38:08.170 We took Your Honor's comments at the conditional 00:38:08.170 --> 00:38:11.070 disclosure statement and added that limited carve 00:38:11.070 --> 00:38:15.530 -out solely for protection of those parties, 00:38:16.090 --> 00:38:18.210 but that was the only change we made with respect 00:38:18.210 --> 00:38:20.809 to Your Honor's ruling at the disclosure statement. 00:38:41.570 --> 00:38:49.050 Okay, which paragraph is it in? Because when 00:38:49.050 --> 00:38:55.630 I read the, sorry, oh, I see, okay. Okay, all 00:38:55.630 --> 00:38:58.250 right. I missed that, sorry. Yeah, I missed that. 00:38:58.630 --> 00:39:04.309 Go ahead. Thank you, Your Honor. Your Honor, 00:39:04.650 --> 00:39:07.710 you'll also see in this paragraph and in the 00:39:07.710 --> 00:39:11.170 releases generally, that there is a new defined 00:39:11.170 --> 00:39:15.389 term called specified releasing parties. Those 00:39:15.389 --> 00:39:17.809 parties, through negotiations with the debtors 00:39:17.809 --> 00:39:20.510 and the committee, agreed to release the debtors 00:39:20.510 --> 00:39:23.110 and their related parties for the pre -petition 00:39:23.110 --> 00:39:26.030 period as part of the settlement of plan issues 00:39:26.030 --> 00:39:28.809 that set the table today for the consensual hearing. 00:39:30.150 --> 00:39:32.849 These specified releasing parties also agreed 00:39:32.849 --> 00:39:35.329 that they will not offensively seek recovery 00:39:35.329 --> 00:39:38.780 against the debtor's D &O policies except and 00:39:38.780 --> 00:39:41.519 except for one lender group, they will not pursue 00:39:41.519 --> 00:39:45.820 preposition claims against the debtors. Again, 00:39:45.940 --> 00:39:48.119 Your Honor, this was one piece of the broader 00:39:48.119 --> 00:39:51.260 settlement that enabled the parties to come before 00:39:51.260 --> 00:39:54.000 Your Honor with a consensual plan. And from the 00:39:54.000 --> 00:39:56.059 debtor's perspective, the releases in the plan 00:39:56.059 --> 00:39:59.219 are appropriate and consensual, consistent with 00:39:59.219 --> 00:40:03.500 the circuit law. Your Honor, in a similar vein, 00:40:03.710 --> 00:40:06.590 You likely saw the schedule of non -released 00:40:06.590 --> 00:40:08.909 parties that was included in the plan's supplement. 00:40:09.550 --> 00:40:13.550 This is a rather novel concept in form and not 00:40:13.550 --> 00:40:17.630 really in substance. Given that this is a liquidating 00:40:17.630 --> 00:40:20.250 plan and the creditor trustee will be looking 00:40:20.250 --> 00:40:22.929 into claims against non -released parties for 00:40:22.929 --> 00:40:25.750 the benefit of its beneficiaries, we decided 00:40:25.750 --> 00:40:29.070 to create a report noting the parties that were 00:40:29.070 --> 00:40:35.090 explicitly not released. To be clear, we're not 00:40:35.090 --> 00:40:38.469 saying that the parties on that schedule have 00:40:38.469 --> 00:40:41.230 claims that are being served, but rather that 00:40:41.230 --> 00:40:43.690 these parties are expressing not being released 00:40:43.690 --> 00:40:46.230 by the plan. And if there is a credible claim 00:40:46.230 --> 00:40:49.010 against them or their respective related parties, 00:40:49.489 --> 00:40:51.869 then the plan doesn't bar an action against those 00:40:51.869 --> 00:40:58.630 parties. As to the debtors' objections, we received 00:40:58.630 --> 00:41:02.579 19 formal objections. and a number of informal 00:41:02.579 --> 00:41:06.559 objections or language in the plan or confirmation 00:41:06.559 --> 00:41:09.199 order. We have worked with each of the parties 00:41:09.199 --> 00:41:12.019 that submitted either formal or informal objections, 00:41:12.500 --> 00:41:14.360 and many of the comments have been reflected 00:41:14.360 --> 00:41:17.440 in the documents filed with the court to that 00:41:17.440 --> 00:41:21.460 effect. There are a few general categories of 00:41:21.460 --> 00:41:25.900 objections outstanding. The first are a series 00:41:25.900 --> 00:41:29.670 of pro se objectors. We received nine formal 00:41:29.670 --> 00:41:33.429 objections and one informal objection to confirmation, 00:41:34.150 --> 00:41:37.349 among other outreach not really related to confirmation 00:41:37.349 --> 00:41:41.130 from various pro se parties, largely alleging 00:41:41.130 --> 00:41:44.230 servicing, installation, or billing disputes. 00:41:45.289 --> 00:41:47.610 Given that the debtors have sold substantially 00:41:47.610 --> 00:41:52.309 all of the estate to Solaris, the debtors have 00:41:52.309 --> 00:41:54.750 worked to connect each of these pro se objectors 00:41:54.750 --> 00:41:57.599 with appropriate personnel at Sunstrong which 00:41:57.599 --> 00:41:59.840 has taken over the management of the customer 00:41:59.840 --> 00:42:03.179 systems and contracts. I will note to the extent 00:42:03.179 --> 00:42:05.500 that these objects thought to opt out of the 00:42:05.500 --> 00:42:08.280 plan's releases, we also coordinated a crawl 00:42:08.280 --> 00:42:10.559 to ensure that they were reflected in the opt 00:42:10.559 --> 00:42:13.599 -out tabulation. We don't believe that any of 00:42:13.599 --> 00:42:16.119 these objections raise a colorable confirmation 00:42:16.119 --> 00:42:19.900 issue or directly implicate the 1129 factors. 00:42:21.289 --> 00:42:23.909 Your Honor, the second category of objectors 00:42:23.909 --> 00:42:26.489 are those of the dealers associated with the 00:42:26.489 --> 00:42:30.110 DOE Puerto Rico Resilience Fund. As Your Honor 00:42:30.110 --> 00:42:32.289 likely remembers from the first day hearing, 00:42:32.769 --> 00:42:35.389 we have thought from the beginning to ensure 00:42:35.389 --> 00:42:38.389 that these dealers continue to receive reimbursements 00:42:38.389 --> 00:42:41.730 under the DOE Fund. We have been negotiating 00:42:41.730 --> 00:42:45.090 final payments for these dealers and the termination 00:42:45.090 --> 00:42:49.030 of that program with counsel for the DOE directly. 00:42:49.630 --> 00:42:52.530 The dealers that operate within that program 00:42:52.530 --> 00:42:55.829 filed objections to confirmation. We have included 00:42:55.829 --> 00:42:58.329 language in the confirmation order noting the 00:42:58.329 --> 00:43:01.829 proposed resolution for this program and reserving 00:43:01.829 --> 00:43:04.989 parties' rights, and in any event, do not believe 00:43:04.989 --> 00:43:07.349 that those arguments relate to confirmation of 00:43:07.349 --> 00:43:21.849 the plan. That leaves us with the U .S. Trustee's 00:43:21.849 --> 00:43:24.869 objection, which largely focuses on the plan's 00:43:24.869 --> 00:43:27.369 third -party release, which I will focus the 00:43:27.369 --> 00:43:30.989 rest of my presentation on. Your Honor, to start 00:43:30.989 --> 00:43:33.730 with the debtor release, no party has specifically 00:43:33.730 --> 00:43:36.230 objected to it, but I think that the context 00:43:36.230 --> 00:43:38.670 supporting that release is really important here. 00:43:39.469 --> 00:43:41.710 The special committee of the board is comprised 00:43:41.710 --> 00:43:44.510 of two decision -set directors and was formed 00:43:44.510 --> 00:43:47.969 in April of this year. The special committee 00:43:47.969 --> 00:43:52.130 and those directors and advisors reviewed potential 00:43:52.130 --> 00:43:54.730 estate costs of action and claims and conducted 00:43:54.730 --> 00:43:59.150 a thorough investigation into those claims that 00:43:59.150 --> 00:44:02.630 the debtors may hold. As noted in the signed 00:44:02.630 --> 00:44:05.550 declaration, the special committee advisors reviewed 00:44:05.550 --> 00:44:09.590 approximately 20 ,000 responsive documents, conducted 00:44:09.590 --> 00:44:13.650 or participated in 38 interviews, and reviewed 00:44:13.650 --> 00:44:17.869 extensive financial information, ultimately culminating 00:44:17.869 --> 00:44:20.429 in a 100 -page report that was presented to both 00:44:20.429 --> 00:44:24.730 the committee and the DIP ad hoc group. The special 00:44:24.730 --> 00:44:27.269 committee ultimately determined that the scope 00:44:27.269 --> 00:44:30.710 of the debtor release is appropriate. For these 00:44:30.710 --> 00:44:33.190 reasons, we believe that the debtor release is 00:44:33.190 --> 00:44:35.849 a reasonable exercise of the special committee's 00:44:35.849 --> 00:44:38.550 business judgment, especially when viewed as 00:44:38.550 --> 00:44:41.960 a piece of the comprehensive whole. Your Honor, 00:44:42.199 --> 00:44:45.639 as to the third party release, I have two observations 00:44:45.639 --> 00:44:49.900 generally. First, all of the releasing parties 00:44:49.900 --> 00:44:52.940 were given the opportunity to opt out of the 00:44:52.940 --> 00:44:57.539 releases. Given the receipt of 543 opt -outs, 00:44:57.980 --> 00:45:00.579 I would say that that opt -out process was successful. 00:45:01.719 --> 00:45:04.440 As this court noted at the container store hearing, 00:45:05.059 --> 00:45:07.860 the major goal and major inquiry that the court 00:45:07.860 --> 00:45:11.550 has to make is Was this a process that was fair 00:45:11.550 --> 00:45:14.789 and intended to get notice to people so that 00:45:14.789 --> 00:45:17.309 they can make a decision? And I think the answer 00:45:17.309 --> 00:45:21.090 to that question here is emphatically yes. All 00:45:21.090 --> 00:45:23.929 parties were at least provided the opportunity 00:45:23.929 --> 00:45:26.849 to opt out in that notice, which was approved 00:45:26.849 --> 00:45:29.530 by this court at the conditional disclosure statement 00:45:29.530 --> 00:45:32.449 hearing and drafted with the input of the various 00:45:32.449 --> 00:45:36.179 stakeholders. Crowell did an incredible job of 00:45:36.179 --> 00:45:38.780 seeking to locate and curb all state voters to 00:45:38.780 --> 00:45:41.340 ensure that parties were afforded the opportunity 00:45:41.340 --> 00:45:45.219 to opt out. Further, given the multiple adjournments 00:45:45.219 --> 00:45:48.679 of the confirmation hearing, we continue to accept 00:45:48.679 --> 00:45:52.500 opt -outs even past the deadline. It is very 00:45:52.500 --> 00:45:54.780 difficult to argue based on the evidence in the 00:45:54.780 --> 00:45:57.340 voting report that the debtors did not adequately 00:45:57.340 --> 00:45:59.980 provide notice with respect to the opt -out process. 00:46:00.300 --> 00:46:03.420 In our view, this process worked exactly as it 00:46:03.420 --> 00:46:07.559 was intended, and the opt -out are an indication 00:46:07.559 --> 00:46:13.239 of such. Moreover, as previously noted, the debtors 00:46:13.239 --> 00:46:15.940 granted several extensions of the voting deadline 00:46:15.940 --> 00:46:19.760 with respect to classes three and five in pursuit 00:46:19.760 --> 00:46:23.340 of a consensual plan. Through that process, we 00:46:23.340 --> 00:46:25.599 were alerted that there were some issues that 00:46:25.599 --> 00:46:29.670 certain holders were having. and opting out and 00:46:29.670 --> 00:46:32.750 simultaneously accepting the plan. We worked 00:46:32.750 --> 00:46:35.170 with the committee advisors and their clients 00:46:35.170 --> 00:46:38.250 to ensure that any party that notified us of 00:46:38.250 --> 00:46:41.329 the desired opt -out was relayed to the poll 00:46:41.329 --> 00:46:45.010 and recorded on the opt -out notice. I'm sorry, 00:46:45.210 --> 00:46:49.349 opt -out tabulation. However, as an added measure, 00:46:49.630 --> 00:46:52.550 the debtors determined it would be prudent to 00:46:52.550 --> 00:46:55.789 extend that opt -out deadline and send a supplemental 00:46:55.789 --> 00:46:59.579 opt -out form to parties in the voting classes, 00:46:59.659 --> 00:47:02.800 that's classes 3, 4, and 5, to ensure that they 00:47:02.800 --> 00:47:06.159 have the opportunity to opt out. We have proposed 00:47:06.159 --> 00:47:10.380 30 days from today as the extended opt -out deadline 00:47:10.380 --> 00:47:15.320 subject to Your Honor's approval. Second, as 00:47:15.320 --> 00:47:18.099 Your Honor noted, since specific lumber, no non 00:47:18.099 --> 00:47:21.139 -consensual third -party releases have been approved 00:47:21.139 --> 00:47:23.940 in the Fifth Circuit. Instead, they're refined 00:47:24.250 --> 00:47:27.429 ways to determine whether releases are consensual, 00:47:27.809 --> 00:47:31.250 and that is through notice and opt -out. The 00:47:31.250 --> 00:47:34.150 Supreme Court was clear and prudent, noting that 00:47:34.150 --> 00:47:36.869 nothing in that opinion should call into question 00:47:36.869 --> 00:47:39.989 consensual third -party releases, and the debtors 00:47:39.989 --> 00:47:42.989 agree with that assertion. The debtors believe 00:47:42.989 --> 00:47:45.269 that the uncontroverted evidence presented by 00:47:45.269 --> 00:47:48.449 Mr. Orchowski, including the number of affidavits 00:47:48.449 --> 00:47:51.610 of service and extensive noticing efforts, show 00:47:51.610 --> 00:47:54.489 that this process worked, and parties were effectively 00:47:54.489 --> 00:47:57.190 given the opportunity to opt out of these releases. 00:47:58.130 --> 00:48:00.590 We believe that the debtor's process and the 00:48:00.590 --> 00:48:03.570 releases are in line with those approved post 00:48:03.570 --> 00:48:07.730 -Purdue, including Vroom, Robert Shaw, Independence, 00:48:08.170 --> 00:48:12.329 Drilling, and Plenty, just to name a few. The 00:48:12.329 --> 00:48:16.250 debtors submit that the thorough pre -confirmation 00:48:16.250 --> 00:48:19.440 opt -out process especially as enhanced with 00:48:19.440 --> 00:48:22.000 the post -confirmation supplemental process, 00:48:22.539 --> 00:48:26.159 goes above and beyond the bare minimum, and has 00:48:26.159 --> 00:48:29.480 truly achieved a consensual opt -out third -party 00:48:29.480 --> 00:48:33.719 release. Finally, the U .S. Trustee takes issue 00:48:33.719 --> 00:48:37.239 with the exculpated parties definition, the injunction 00:48:37.239 --> 00:48:39.880 provision, and the waiver of the 14 -day stay. 00:48:40.800 --> 00:48:44.090 As to the former, Both the exculpation provision 00:48:44.090 --> 00:48:48.269 and the 1125E exculpated parties definition are 00:48:48.269 --> 00:48:50.530 narrowly tailored to include parties that were 00:48:50.530 --> 00:48:52.909 actively involved in these Chapter 11 cases. 00:48:53.730 --> 00:48:56.429 As noted earlier with respect to the debtor relief, 00:48:57.030 --> 00:48:59.369 the special committee has been extremely instrumental 00:48:59.369 --> 00:49:02.869 in these cases. Not only did they conduct the 00:49:02.869 --> 00:49:05.489 investigation, but as noted in the first day 00:49:05.489 --> 00:49:08.670 declaration, they were delegated broad authority 00:49:08.670 --> 00:49:12.289 to analyze and consider any transaction and conflict 00:49:12.289 --> 00:49:16.710 matter. At times for these cases, they were consulted 00:49:16.710 --> 00:49:19.409 multiple times a week, and given that management 00:49:19.409 --> 00:49:23.170 resigned at the close of sale on September 3rd, 00:49:23.289 --> 00:49:26.210 the Special Committee and the CRO, Mr. O'Mahondro, 00:49:26.409 --> 00:49:28.789 have been acting as the cherries for the betters 00:49:28.789 --> 00:49:32.090 for the estate. We believe that the exculpated 00:49:32.090 --> 00:49:35.179 party's provisions are consistent with other 00:49:35.179 --> 00:49:37.559 cases of curbing of the district post -Highland, 00:49:37.980 --> 00:49:40.920 such as desktop metal, global clean energy, and 00:49:40.920 --> 00:49:44.559 instant brands, among others. The injunction 00:49:44.559 --> 00:49:47.000 provisions, including the post -affected date 00:49:47.000 --> 00:49:49.699 litigation injunctions, here are also consistent 00:49:49.699 --> 00:49:52.880 with Highland 1 and Highland 2. The injunction 00:49:52.880 --> 00:49:55.139 provision is a standard injunction preventing 00:49:55.139 --> 00:49:58.880 parties subject to consensual releases from pursuing 00:49:58.880 --> 00:50:01.800 release claims, and it's necessary to enforce 00:50:01.800 --> 00:50:05.739 those releases. The post effective date litigation 00:50:05.739 --> 00:50:08.480 injunctions are narrow additional enforcement 00:50:08.480 --> 00:50:12.079 mechanisms specifically to protect if state causes 00:50:12.079 --> 00:50:15.460 of action that vest in the creditor trust and 00:50:15.460 --> 00:50:18.800 to enforce the exculpation in favor of the exculpated 00:50:18.800 --> 00:50:23.699 parties. With respect to the 14th day of effectiveness, 00:50:24.539 --> 00:50:28.159 it is no secret, and Mr. Schartz noted, that 00:50:28.159 --> 00:50:30.239 these cases have been concerned with liquidity 00:50:30.239 --> 00:50:33.550 since the petition date. The debtors are conscious 00:50:33.550 --> 00:50:36.389 that every minute spent by the debtors' professionals 00:50:36.389 --> 00:50:39.469 and all other professionals takes money away 00:50:39.469 --> 00:50:41.530 from the beneficiaries of the credit or trust, 00:50:41.889 --> 00:50:44.050 and the debtors would assert the cause exists 00:50:44.050 --> 00:50:48.309 to justify the 14 -day stay waiver. With that, 00:50:48.829 --> 00:50:51.269 I would conclude my argument as to the case in 00:50:51.269 --> 00:50:54.250 chief and reserve time for any responses, Your 00:50:54.250 --> 00:51:01.119 Honor. Other than Mr. Jimenez, does anyone else 00:51:01.119 --> 00:51:03.780 wish to be heard in opposition to confirmation? 00:51:11.619 --> 00:51:22.960 Yes, go ahead, Mr. Esselstyn. Can you hear me 00:51:22.960 --> 00:51:26.519 now? I can. Good morning, Your Honor. My name 00:51:26.519 --> 00:51:29.159 is your teacher, Mr. Esselstyn. Okay, a moment. 00:51:29.880 --> 00:51:33.739 I have two contracts, one energized and one unenergized. 00:51:34.219 --> 00:51:36.940 I call a supplemental motion to inform the self 00:51:36.940 --> 00:51:42.500 -order and section 365B. May I be here briefly 00:51:42.500 --> 00:51:45.980 on narrow interim release, please? Go ahead. 00:51:47.500 --> 00:51:51.679 Thank you. Respectfully, three business day identifications 00:51:51.679 --> 00:51:54.420 to the assigned needs servicer and an authorized 00:51:54.420 --> 00:51:58.699 signatory for my line. The status quo. no activation 00:51:58.699 --> 00:52:02.179 of the unenergized line, and no adverse credit 00:52:02.179 --> 00:52:06.320 or collection on the sealed amounts. Three seven 00:52:06.320 --> 00:52:09.579 -day minimum data, monthly billing, AC reduction 00:52:09.579 --> 00:52:13.559 consumption, and four quality logs with sure 00:52:13.559 --> 00:52:17.559 status. If that is content, the purchaser controlled 00:52:17.559 --> 00:52:21.199 it. Please order doctors to cost those items 00:52:21.199 --> 00:52:27.110 to retain timeframe. All right, thank you. I'm 00:52:27.110 --> 00:52:30.650 going to go ahead and mute again because we're 00:52:30.650 --> 00:53:17.829 still getting a lot of background noise. Conference 00:53:17.829 --> 00:53:24.969 unmuted. Okay, I don't know. We're having some 00:53:24.969 --> 00:53:27.949 problems here. Okay, thank you, Mr. Sosa. I'll 00:53:27.949 --> 00:53:37.349 just have it up. All right, Mr. Ortega? Yes, 00:53:37.590 --> 00:53:41.030 sir. Can you hear me, sir? Yes, I can. Wait a 00:53:41.030 --> 00:53:42.829 minute. My name is Daniel Ortega. I'm close to 00:53:42.829 --> 00:53:46.090 a creditor with frame number 1473. I'm appearing 00:53:46.090 --> 00:53:48.750 on my docket in motion for sanctions and rescission. 00:53:48.769 --> 00:53:52.170 I just wanted permission to speak on that. Go 00:53:52.170 --> 00:53:56.550 ahead. So basically with the fair debt collection 00:53:56.550 --> 00:53:59.769 practice of that, I sent in a validation of debt 00:53:59.769 --> 00:54:04.349 in 15 days, calendar days to get that back. I 00:54:04.349 --> 00:54:06.690 never received anything on it, no response whatsoever. 00:54:07.429 --> 00:54:10.849 So to me, that's a refusal to validate. They 00:54:10.849 --> 00:54:13.730 never validated, but took two post debits afterwards. 00:54:14.219 --> 00:54:19.139 They debited me a 62370 on September 9th and 00:54:19.139 --> 00:54:24.800 on October 8th. So under the FD, CPA 1692K, that's 00:54:24.800 --> 00:54:28.179 a thousand per debit there for the violations. 00:54:28.360 --> 00:54:32.260 So I'm asking for that. And then there's no cure. 00:54:32.360 --> 00:54:41.239 So to reject the PPA. All right. Thank you. All 00:54:41.239 --> 00:54:43.820 right, anyone else wish to be heard in opposition 00:54:43.820 --> 00:54:49.780 to confirmation? I know, Mr. Jimenez, I'll come 00:54:49.780 --> 00:54:57.679 to you. All right, Mr. Jimenez? Thank you, Your 00:54:57.679 --> 00:54:59.820 Honor. Andrew Jimenez for the United States recipe. 00:55:01.019 --> 00:55:05.679 Your Honor, before I move forward with my objection, 00:55:05.949 --> 00:55:09.889 Um, I would like to just do, uh, a quick question 00:55:09.889 --> 00:55:12.750 from nation to Mr. Osherski regarding the tabulation 00:55:12.750 --> 00:55:17.030 of votes. Okay. Mr. Osherski, are you available? 00:55:18.769 --> 00:55:22.570 Can you turn on your camera? Yes, I'm available. 00:55:23.909 --> 00:55:27.449 Uh, just turn on the camera. Okay. Did you raise 00:55:27.449 --> 00:55:31.570 your right hand, sir? Yes. Do you found Mr. Osherski's 00:55:31.570 --> 00:55:32.989 firm to tell the truth and will truth and nothing 00:55:32.989 --> 00:55:36.780 but the truth? Yes, I do. All right, go ahead, 00:55:36.820 --> 00:55:39.199 Mr. Jimenez. Thank you, Your Honor. Good morning, 00:55:39.280 --> 00:55:42.940 Mr. Urscherski. Can you hear me? Yes, I can hear 00:55:42.940 --> 00:55:46.380 you. Good morning. Good morning. Mr. Urscherski, 00:55:47.139 --> 00:55:49.420 did you listen a moment ago, a debtors council 00:55:49.420 --> 00:55:52.920 informed the court that the debtors receive approximately 00:55:52.920 --> 00:55:59.139 543 opt -outs from creditors? Yes, I heard that. 00:55:59.880 --> 00:56:03.000 Okay. And you agree with that number? That number 00:56:03.000 --> 00:56:07.929 is correct? Yes. Could you tell the court how 00:56:07.929 --> 00:56:11.849 many ballots with an opt -out form were sent 00:56:11.849 --> 00:56:17.849 out to creditors? Well, there was approximately 00:56:17.849 --> 00:56:25.070 8 ,000 ballots that were sent out with the opt 00:56:25.070 --> 00:56:27.809 -out box included on a ballot. And I believe 00:56:27.809 --> 00:56:32.349 it was referenced in the presentation by Ms. 00:56:32.449 --> 00:56:38.059 Rainey. There were also approximately 35. 35 00:56:38.059 --> 00:56:42.380 ,500 non -voting notices and opt -out forms sent 00:56:42.380 --> 00:56:46.179 to non -voting classes as well. I'm sorry. You 00:56:46.179 --> 00:56:57.099 said 35 ,000 or 3 ,500? 35 ,000. 35 ,500. I got 00:56:57.099 --> 00:57:08.210 you. OK. And of all those, ballots for creditors 00:57:08.210 --> 00:57:12.849 and also all those forms, non -voting forms that 00:57:12.849 --> 00:57:16.130 were sent out. How many were returned undeliverable? 00:57:19.210 --> 00:57:23.070 I'm not sure I don't have that number right now. 00:57:24.170 --> 00:57:26.789 Okay, can you tell the court if any of those 00:57:26.789 --> 00:57:30.110 ballots and non -voting forms were returned undeliverable? 00:57:32.920 --> 00:57:36.139 I can't right now. I'd have to check with my 00:57:36.139 --> 00:57:39.679 team. I don't have that information right now. 00:57:56.750 --> 00:58:00.530 Do you have a breakdown from the 543 opt -outs 00:58:00.530 --> 00:58:02.769 that were received? Do you have a breakdown as 00:58:02.769 --> 00:58:06.969 to how many of those were from voting creditors 00:58:06.969 --> 00:58:13.750 and how many were from non -voting parties? Yeah, 00:58:14.250 --> 00:58:17.030 that information can be found in my declaration. 00:58:17.130 --> 00:58:23.449 I don't have the accounts right now, but it can 00:58:23.449 --> 00:58:28.440 be discerned from the evidence. Will it help 00:58:28.440 --> 00:58:31.539 you if we pull up your declaration to find out? 00:58:32.480 --> 00:58:35.940 Sure. Your Honor, if I could have the container 00:58:35.940 --> 00:59:03.719 roll. Can you see my screen, Mr. Prachoski? Yes. 00:59:04.699 --> 00:59:06.559 OK. Is this big enough, or would you like me 00:59:06.559 --> 00:59:14.179 to enlarge the image? This is fine. OK. So where 00:59:14.179 --> 00:59:17.079 should we go in your declaration to find out 00:59:17.079 --> 00:59:21.880 that information? So the exhibits C1 and C2, 00:59:21.980 --> 00:59:24.059 so the last two exhibits of the declaration. 00:59:25.199 --> 00:59:49.219 OK. Okay, did you see one? Okay, what would you 00:59:49.219 --> 00:59:51.239 like me to go? Should I keep scrolling down? 00:59:51.980 --> 00:59:55.460 Yeah, so Mr. Minnis, it's like I guess I don't 00:59:55.460 --> 00:59:57.579 have like I don't have the number I guess of 00:59:57.579 --> 01:00:01.019 the 543 I'd be estimating if I told you how many 01:00:01.019 --> 01:00:03.420 like general unsecured claims I see just based 01:00:03.420 --> 01:00:06.480 on like the number of rows included in that page 01:00:07.369 --> 01:00:10.409 I would, if I pulled up the Excel exhibits and 01:00:10.409 --> 01:00:13.190 not the PDF form, I could get a count of the 01:00:13.190 --> 01:00:16.289 number by class. But just looking at the pages, 01:00:16.489 --> 01:00:19.949 I'd kind of be guesstimating as to how many, 01:00:21.309 --> 01:00:23.670 as you can see from C1, it looks like a majority 01:00:23.670 --> 01:00:26.449 of these are, a large majority are from the General 01:00:26.449 --> 01:00:31.309 Insurance Claimants, with a handful coming from 01:00:31.309 --> 01:00:40.300 the non -voting classes. C2 has public securities 01:00:40.300 --> 01:00:48.820 holders that are in classes 3, 5, and 8. And 01:00:48.820 --> 01:00:55.039 similarly, I believe that most of the opt -outs 01:00:55.039 --> 01:00:59.119 included on this exhibit are from holders in 01:00:59.119 --> 01:01:02.719 classes 3 and 5 with a handful also coming from 01:01:02.719 --> 01:01:09.159 the holders in class 8. Those are all the questions 01:01:09.159 --> 01:01:12.340 I have for you, Mr. Ostrowski. Thank you. Okay. 01:01:12.340 --> 01:01:18.820 Thank you. Okay. Thank you, Your Honor. Now let 01:01:18.820 --> 01:01:25.920 me just move to summarize the issues that I think 01:01:25.920 --> 01:01:30.440 still remain, Your Honor. And I'm going to start 01:01:30.440 --> 01:01:33.920 by what I think should be the easiest one, because 01:01:33.920 --> 01:01:36.719 I think we had our conversations with the debtor 01:01:36.719 --> 01:01:40.250 and to find the appropriate language to address 01:01:40.250 --> 01:01:43.369 this issue. So the request is better to include 01:01:43.369 --> 01:01:46.570 a language if not in the plan, at least in the 01:01:46.570 --> 01:01:49.789 confirmation order regarding preserving the police 01:01:49.789 --> 01:01:52.530 and military powers of governmental units and 01:01:52.530 --> 01:02:01.389 making sure that the plan, confirmation of the 01:02:01.389 --> 01:02:04.469 plan would not discharge claims of governmental 01:02:04.469 --> 01:02:08.730 units. And to that effect, I believe that the 01:02:08.730 --> 01:02:12.710 debtors incorporated language in the proposed 01:02:12.710 --> 01:02:14.949 confirmation order that was filed last night 01:02:14.949 --> 01:02:19.510 at Docket 1188. However, in paragraph 117, Your 01:02:19.510 --> 01:02:22.590 Honor, I think there is a sentence that I think 01:02:22.590 --> 01:02:28.909 pokes a big hole into that provision. Earlier 01:02:28.909 --> 01:02:31.650 this morning, I requested the debtor to make 01:02:31.650 --> 01:02:35.130 a notification to paragraph 117. I think they 01:02:35.130 --> 01:02:37.349 have agreed to that, Your Honor, and to that 01:02:37.349 --> 01:02:41.710 extent that they make that notification, then 01:02:41.710 --> 01:02:45.309 that issue is resolved. But I just want to make 01:02:45.309 --> 01:02:47.849 the court aware that what was filed last night 01:02:47.849 --> 01:02:51.150 is still needs a small notification in Paragraph 01:02:51.150 --> 01:02:55.130 117. All right, before you go on, Ms. Rainey, 01:02:55.269 --> 01:03:00.050 is that, I'm looking at 117 right now, is that 01:03:00.050 --> 01:03:03.489 acceptable to the debtor? Yes, Your Honor, it 01:03:03.489 --> 01:03:08.090 is. Okay, and which sentence is it, Mr. Jimenez? 01:03:09.190 --> 01:03:14.769 So, Your Honor, if you look at 117, if you look 01:03:14.769 --> 01:03:19.170 at the second half, when it starts, it reads, 01:03:19.170 --> 01:03:21.409 uh, provided that the bankruptcy court retains 01:03:21.409 --> 01:03:23.929 jurisdiction to determine whether environmental 01:03:23.929 --> 01:03:26.750 liabilities asserted by any governmental unit 01:03:26.750 --> 01:03:29.630 or other entity are discharged or whether it's 01:03:29.630 --> 01:03:31.909 barred by the plan or related to undocumented 01:03:31.909 --> 01:03:35.090 fiscal information orders. Any other order relating 01:03:35.090 --> 01:03:40.170 to the debtor or the bankruptcy code? Okay, I 01:03:40.170 --> 01:03:45.309 see. And so that X would be taken out? Correct, 01:03:45.349 --> 01:03:52.210 Your Honor. Okay. And to be specific... Yes, 01:03:52.349 --> 01:03:57.750 the X would be taken out. Okay. Thank you, Your 01:03:57.750 --> 01:04:04.360 Honor. Yes, because everyone please mute their 01:04:04.360 --> 01:04:15.800 phone. I don't know we're having a problem Conference 01:04:15.800 --> 01:04:25.940 muted conference unmuted All right, go ahead 01:04:25.940 --> 01:04:28.119 mr. Jimenez, I'm sorry, it's just background 01:04:28.119 --> 01:04:32.780 noise. Okay, your honor uh so your honor this 01:04:32.780 --> 01:04:40.099 the plan um the amended plan uh has two categories 01:04:40.099 --> 01:04:43.099 two different categories of exculpated parties 01:04:43.099 --> 01:04:45.460 and i'm going to start with the first one which 01:04:45.460 --> 01:04:50.960 is it's it's called 1125e exculpated party so 01:04:50.960 --> 01:04:54.619 my objection to that category of 1125e exculpated 01:04:54.619 --> 01:04:59.460 parties is that uh It's not narrowly tailored, 01:04:59.460 --> 01:05:04.139 Your Honor. It includes related parties. I object 01:05:04.139 --> 01:05:06.639 to the inclusion of related parties in that definition 01:05:06.639 --> 01:05:09.480 of what otherwise would be the 1125 fiasco -created 01:05:09.480 --> 01:05:13.059 party, because those related parties, Your Honor, 01:05:13.440 --> 01:05:15.599 are not fully identified. We don't know who they 01:05:15.599 --> 01:05:19.139 are. It's a broad definition that would include 01:05:19.139 --> 01:05:21.400 a lot of people that we think we don't know who 01:05:21.400 --> 01:05:24.880 they are. So my objection is that related parties 01:05:24.880 --> 01:05:28.519 should be removed. from that definition of 1125E 01:05:28.519 --> 01:05:33.320 exculpated parties. And I want to move on now 01:05:33.320 --> 01:05:36.900 to exculpated parties, which is a different category 01:05:36.900 --> 01:05:39.800 in the plan. And in the exculpated parties, Your 01:05:39.800 --> 01:05:44.440 Honor, our objection is that it includes the 01:05:44.440 --> 01:05:47.739 definition of exculpated parties includes the 01:05:47.739 --> 01:05:51.380 special committee. Our position is that the inclusion 01:05:51.380 --> 01:05:54.219 of the special committee is not authorized under 01:05:54.219 --> 01:05:57.289 Highland Capital, Your Honor. And we are requesting 01:05:57.289 --> 01:06:00.570 that the special committee be removed from that 01:06:00.570 --> 01:06:04.190 definition of escalated pardon. Under Highland 01:06:04.190 --> 01:06:09.769 Capital, Your Honor, directors or independent 01:06:09.769 --> 01:06:13.130 directors can only receive an escalation under 01:06:13.130 --> 01:06:17.010 very specific circumstances that we had in Highland 01:06:17.010 --> 01:06:19.530 Capital, which we don't have here, Your Honor. 01:06:19.869 --> 01:06:22.449 And I don't think under Fifth Circuit precedent, 01:06:22.949 --> 01:06:25.769 the veterans are authorized to give exculpation 01:06:25.769 --> 01:06:32.670 to the special committee. Finally, last but not 01:06:32.670 --> 01:06:37.489 least, Your Honor, we reiterate our objection 01:06:37.489 --> 01:06:41.269 to the upheld mechanism, Your Honor. That objection 01:06:41.269 --> 01:06:44.590 has been fully briefed previously, so I'm not 01:06:44.590 --> 01:06:47.869 going to take the court's time reciting that 01:06:47.869 --> 01:06:50.889 again, Your Honor, but we have concerns about 01:06:50.889 --> 01:06:53.730 the party's that will be subject to the third 01:06:53.730 --> 01:06:58.710 -party releases giving appropriate consent. Editors' 01:06:58.989 --> 01:07:03.110 Council in their arguments stated to the court 01:07:03.110 --> 01:07:08.050 that the uptown mechanism was successful because 01:07:08.050 --> 01:07:12.769 the debtor received 543 uptowns. I would submit 01:07:12.769 --> 01:07:16.650 to the court, Your Honor, that we've only received 01:07:16.650 --> 01:07:19.889 a very small number of uptowns out of a very 01:07:19.889 --> 01:07:24.039 large universe of and non -voting parties that 01:07:24.039 --> 01:07:27.940 are able to participate in the opt -out. Over 01:07:27.940 --> 01:07:30.719 8 ,000 ballots for voting predators were sent 01:07:30.719 --> 01:07:35.139 out with an opt -out mechanism, and 35 ,500 were 01:07:35.139 --> 01:07:40.820 sent to non -voting parties. So we have over 01:07:40.820 --> 01:07:46.079 42 ,000 opt -out forms were sent out, Your Honor, 01:07:46.139 --> 01:07:51.119 and we only got about... received back 543. That 01:07:51.119 --> 01:07:54.119 is a very small number. That is a very small 01:07:54.119 --> 01:07:57.840 participation. And I don't think that shows that 01:07:57.840 --> 01:08:02.199 the opt -out mechanism is successful or appropriate 01:08:02.199 --> 01:08:06.179 in this type of case, Your Honor. I know the 01:08:06.179 --> 01:08:11.880 committee has reached a... settlement with the 01:08:11.880 --> 01:08:14.619 debtors in our approving the plan, Your Honor. 01:08:14.920 --> 01:08:17.500 But if you remember back when we were discussing 01:08:17.500 --> 01:08:20.859 the disclosure statement, the conditional approval 01:08:20.859 --> 01:08:23.140 of the disclosure statement, the committee raised 01:08:23.140 --> 01:08:26.340 the concern that the opt -out mechanism was not 01:08:26.340 --> 01:08:28.880 appropriate and that it should have been an opt 01:08:28.880 --> 01:08:34.359 -in mechanism. Our objection was a little different, 01:08:34.439 --> 01:08:37.090 Your Honor. But I think – I just mentioned it 01:08:37.090 --> 01:08:39.609 to illustrate that those concerns about the opt 01:08:39.609 --> 01:08:45.750 -out mechanism I think still remain and are still 01:08:45.750 --> 01:08:49.449 objectionable at this stage. So that's all I 01:08:49.449 --> 01:08:52.409 have for the court this morning, and thank you 01:08:52.409 --> 01:08:54.189 for the opportunity and for listening, Your Honor. 01:08:54.989 --> 01:08:57.890 Thank you. Good. Okay. Thank you. All right. 01:08:58.609 --> 01:09:00.449 If no one else wishes to be heard in opposition, 01:09:00.649 --> 01:09:03.500 go ahead, Mr. Reagan. Thank you, Your Honor. 01:09:03.840 --> 01:09:07.159 Just to take Mr. Jimenez's comments in turn, 01:09:07.680 --> 01:09:11.800 first to the scope of the 1125E exculpated parties 01:09:11.800 --> 01:09:16.060 definition, that definition notes that the related 01:09:16.060 --> 01:09:19.300 parties are only included to the extent permitted 01:09:19.300 --> 01:09:23.380 under Section 1125E of the bankruptcy code. So 01:09:23.380 --> 01:09:28.500 I believe that that proviso substantially narrows 01:09:28.500 --> 01:09:31.039 the scope of this definition and should be considered 01:09:31.039 --> 01:09:36.979 appropriate. As to the Special Committee, I will 01:09:36.979 --> 01:09:39.399 rely on my previous statements as to all of the 01:09:39.399 --> 01:09:41.439 work that has been done by the Special Committee, 01:09:41.739 --> 01:09:44.880 and I believe that similar definitions have been 01:09:44.880 --> 01:09:48.300 approved by Your Honor in courts in this district. 01:09:49.300 --> 01:09:53.699 As to the scope of the opt -outs, I don't believe 01:09:53.699 --> 01:09:57.819 that there is a numerical threshold that's required 01:09:57.819 --> 01:10:01.960 to show that opt -outs are consensual. Not only 01:10:01.960 --> 01:10:07.680 were opt -outs forms broadly populated to the 01:10:07.680 --> 01:10:10.479 voting classes and non -voting classes, but there 01:10:10.479 --> 01:10:13.239 was a publication notice filed in the New York 01:10:13.239 --> 01:10:16.960 Times, the Financial Times, and the San Juan 01:10:16.960 --> 01:10:22.060 Daily News. So, Your Honor, I would submit that 01:10:22.060 --> 01:10:27.079 contrary to Mr. Jimenez's assertion, these opt 01:10:27.079 --> 01:10:30.930 -outs were indeed consensual. and will be further 01:10:30.930 --> 01:10:33.750 bolstered by the supplemental opt -out notices 01:10:33.750 --> 01:10:37.390 that will be sent after this hearing if Your 01:10:37.390 --> 01:10:39.770 Honor approves it. Thank you so much, Your Honor. 01:10:40.350 --> 01:10:45.210 All right. Anyone else wish to be heard? Yes, 01:10:46.350 --> 01:10:49.270 Your Honor. Henry Cavane? Yes, Henry Cavane. 01:10:49.430 --> 01:10:54.409 Go ahead. Thank you, Your Honor. I just wanted 01:10:54.409 --> 01:10:58.369 to follow up on Ms. Rainey's introduction about 01:10:58.369 --> 01:11:03.649 the DOE resolution and the concern dealers had. 01:11:05.149 --> 01:11:07.489 Just like Mr. Schartz started his presentation 01:11:07.489 --> 01:11:10.670 with kind of a timeline of what happened in this 01:11:10.670 --> 01:11:14.170 case, there was a similar timeline with respect 01:11:14.170 --> 01:11:17.590 to the dealer's concerns about the DOE program 01:11:17.590 --> 01:11:20.170 and the dealer's reimbursements under that program. 01:11:20.770 --> 01:11:23.250 As you may recall, at various points in the case, 01:11:23.630 --> 01:11:26.550 orders were entered and they were all intended 01:11:26.550 --> 01:11:30.329 to protect the dealer's rights to reimbursement 01:11:30.329 --> 01:11:33.550 at various stages of the case. The debtors agree 01:11:33.550 --> 01:11:36.689 to honor their obligations under the program 01:11:36.689 --> 01:11:39.670 and fulfill their obligations. Do you want this? 01:11:40.390 --> 01:11:44.430 You have to use them. Everyone, please mute your 01:11:44.430 --> 01:11:46.649 line. Please. Go ahead, Mr. Gray. I'm sorry. 01:11:47.010 --> 01:11:49.710 Everyone, please mute their lines. Thank you. 01:11:49.729 --> 01:11:53.050 Go ahead. Thank you, Your Honor. And yet, as 01:11:53.050 --> 01:11:56.470 we approach confirmation, my client, Wynmar, 01:11:56.829 --> 01:12:00.329 We still owed millions of dollars under the DOE 01:12:00.329 --> 01:12:03.590 program on account of many hundreds of completed 01:12:03.590 --> 01:12:08.189 projects. And our concern was simply that getting 01:12:08.189 --> 01:12:11.409 to this point of confirmation, we just did not 01:12:11.409 --> 01:12:15.970 want the debtors to exit stage left without fulfilling 01:12:15.970 --> 01:12:19.529 their ongoing obligations to reimburse us. And 01:12:19.529 --> 01:12:22.350 we've been working very hard with the Department 01:12:22.350 --> 01:12:25.310 of Energy and the debtors and the other dealers 01:12:25.310 --> 01:12:28.569 affected by this. to reach a letter agreement 01:12:28.569 --> 01:12:32.970 that is between Mr. Alejandro on behalf of the 01:12:32.970 --> 01:12:37.069 debtors, the Department of Energy, and the effective 01:12:37.069 --> 01:12:40.949 dealers in Puerto Rico, under which the debtors 01:12:40.949 --> 01:12:43.390 will continue, notwithstanding confirmation, 01:12:43.590 --> 01:12:45.689 notwithstanding the effectiveness of the plan, 01:12:46.229 --> 01:12:49.970 to upload the documentation that entitles the 01:12:49.970 --> 01:12:52.649 dealers to reimbursements from the DOE program, 01:12:53.710 --> 01:12:57.210 the DOE's remittances, Once they're passed down 01:12:57.210 --> 01:13:00.229 to the debtor's bank accounts as the recipient 01:13:00.229 --> 01:13:04.329 of the award, the debtors have also continued, 01:13:04.489 --> 01:13:07.909 they will continue to process those payments 01:13:07.909 --> 01:13:12.250 for passing through to the dealers. So we believe 01:13:12.250 --> 01:13:16.489 even though we're not quite there, we are hopeful 01:13:16.489 --> 01:13:19.329 we'll be able to execute that letter agreement 01:13:19.329 --> 01:13:21.750 today. But I wanted to give the court a little 01:13:21.750 --> 01:13:27.420 more context. for the DOE resolution, and I thank 01:13:27.420 --> 01:13:30.399 you for your time. Thank you. All right. Does 01:13:30.399 --> 01:13:39.699 anyone else wish to be heard? All right. So before 01:13:39.699 --> 01:13:43.199 me is final approval of the disclosure statement 01:13:43.199 --> 01:13:48.500 and the confirmation of the debtor's plan. I 01:13:48.500 --> 01:13:52.239 have a few comments, and then I'll issue my ruling. 01:13:52.600 --> 01:13:58.640 I have a question, Ms. Rainey, with respect to 01:13:58.640 --> 01:14:02.939 the ability to assume or reject executive contract. 01:14:03.579 --> 01:14:07.859 And there are, there's a paragraph, the old paragraph 01:14:07.859 --> 01:14:13.060 37 and 128 of the confirmation order. I know 01:14:13.060 --> 01:14:16.600 it's been amended now again. And so my concern 01:14:16.600 --> 01:14:21.220 is the situation where someone supports the plan 01:14:21.220 --> 01:14:24.560 thinking that their contract is going to be assumed 01:14:24.560 --> 01:14:27.760 and there's no cure dispute and then it's subsequently 01:14:27.760 --> 01:14:30.800 rejected. So I understand the situation where 01:14:30.800 --> 01:14:34.739 you're seeking to assume there's a cure dispute 01:14:34.739 --> 01:14:38.260 and then the cure dispute comes out in a way 01:14:38.260 --> 01:14:45.039 that you don't like and you can reject the contract. 01:14:45.420 --> 01:14:49.779 But what I don't want is the situation where 01:14:49.779 --> 01:14:53.920 you... say you're going to assume there is no 01:14:53.920 --> 01:14:56.579 cure dispute, and then you subsequently reject 01:14:56.579 --> 01:15:00.739 the contract. So I just want to make clear that 01:15:00.739 --> 01:15:03.020 that is not the situation that you're talking 01:15:03.020 --> 01:15:08.319 about. Because paragraph 37, the plan says all 01:15:08.319 --> 01:15:10.119 executory contracts are going to be rejected 01:15:10.119 --> 01:15:13.560 unless there's a pending motion to assume. So 01:15:13.560 --> 01:15:16.020 if there's a pending motion to assume and no 01:15:16.020 --> 01:15:19.899 cure dispute, then it should be assumed. And 01:15:19.899 --> 01:15:22.380 I don't think And if they vote in favor of the 01:15:22.380 --> 01:15:30.000 plan, then it should be assumed. Otherwise, I 01:15:30.000 --> 01:15:33.119 don't think it's fair or equitable at that point. 01:15:33.619 --> 01:15:35.899 So it's just a language change. And I just want 01:15:35.899 --> 01:15:39.579 to make sure that there isn't this appears to 01:15:39.579 --> 01:15:42.859 be a conflict there, or at least an ambiguity. 01:15:45.220 --> 01:15:47.720 Understood, Your Honor. And we can add clarifying 01:15:47.720 --> 01:15:51.439 language to that effect. Yeah. OK. In paragraph 01:15:51.439 --> 01:15:55.319 131 of the old confirmation order, the provision 01:15:55.319 --> 01:16:00.560 regarding revenues under Puerto Rico law, this 01:16:00.560 --> 01:16:06.319 is the consumer's rights under Puerto Rican law. 01:16:06.479 --> 01:16:10.180 I don't know how the concept, how the opt -out 01:16:10.180 --> 01:16:17.079 concept works there. So it says under the old 01:16:17.079 --> 01:16:20.060 paragraph 137, You know, that notwithstanding 01:16:20.060 --> 01:16:23.420 anything in the order, there are, if any, pre 01:16:23.420 --> 01:16:25.560 -petition obligations, regulatory determinations, 01:16:25.979 --> 01:16:28.159 administrative enforcements under Puerto Rico 01:16:28.159 --> 01:16:32.159 consumer contracts shall not be extinguished 01:16:32.159 --> 01:16:34.560 solely to the extent somebody timely opted out. 01:16:34.659 --> 01:16:37.779 I don't know what an opt -out has to do with 01:16:37.779 --> 01:16:43.380 this. The contracts were sold subject to 365 01:16:43.380 --> 01:16:46.979 -0, and whatever the rights are under 365 -0, 01:16:47.060 --> 01:16:49.260 those rights are... are maintained, but this 01:16:49.260 --> 01:16:53.199 order shouldn't affect the sale order. So I don't 01:16:53.199 --> 01:16:57.479 understand how the opt -out mechanism works with 01:16:57.479 --> 01:17:01.819 respect to Paragraph 131. Good morning, honor. 01:17:01.880 --> 01:17:05.039 Can you hear me? Yes, I can hear you. Great. 01:17:05.439 --> 01:17:07.619 Mike Coe, Kirkland & Ellis on behalf of the debtors. 01:17:08.359 --> 01:17:11.319 So Paragraph 131 regarding rights and remedies 01:17:11.319 --> 01:17:15.920 under Puerto Rico law is a mostly negotiated 01:17:15.920 --> 01:17:18.760 resolution of one of the informal pro se objections. 01:17:19.439 --> 01:17:22.100 Ms. Barrera had filed a number of pleadings on 01:17:22.100 --> 01:17:23.939 the docket. I'm not sure if she's on the call 01:17:23.939 --> 01:17:27.739 this morning, but we had communicated back and 01:17:27.739 --> 01:17:29.699 forth with her a few times and we had asked her 01:17:29.699 --> 01:17:31.359 for some proposed language that would resolve 01:17:31.359 --> 01:17:36.020 her objection for the order. This is a resolution 01:17:36.020 --> 01:17:38.300 amongst us. We haven't been able to contact Ms. 01:17:38.399 --> 01:17:40.140 Barrera since we included this in the order to 01:17:40.140 --> 01:17:43.470 confirm that she signed off on it. But it's fairly 01:17:43.470 --> 01:17:46.010 close to what she had requested in the first 01:17:46.010 --> 01:17:49.229 place. So if there are revisions to the language 01:17:49.229 --> 01:17:50.750 that your Honor would prefer we include, we're 01:17:50.750 --> 01:17:53.130 happy to do so. I believe the reference to the 01:17:53.130 --> 01:17:55.510 opt -out was simply to ensure, number one, that 01:17:55.510 --> 01:17:57.789 she was noted as having opted out, and number 01:17:57.789 --> 01:18:00.149 two, that it wouldn't interfere with the otherwise 01:18:00.149 --> 01:18:03.029 reservation of her rights as she requested. All 01:18:03.029 --> 01:18:05.130 right. Yeah. So I would just take out solely 01:18:05.130 --> 01:18:08.569 as the holder's claim that family opted out. 01:18:08.779 --> 01:18:11.479 party releases and are not releasing parties, 01:18:11.520 --> 01:18:15.960 I would just take that out. And the sale order 01:18:15.960 --> 01:18:18.979 stands. There was a, you know, the sale order 01:18:18.979 --> 01:18:25.319 was a broad release subject to 3650. All right. 01:18:25.420 --> 01:18:30.699 Then my last question, well, two others. The, 01:18:30.819 --> 01:18:35.960 so in paragraph 32 of the old confirmation order, 01:18:36.750 --> 01:18:42.029 The talks about that the purchaser will fund 01:18:42.029 --> 01:18:49.310 the purchaser settlement fund Settlement amount 01:18:49.310 --> 01:18:54.109 but then paragraph 171 of the confirmation order 01:18:54.109 --> 01:18:57.390 talks about purchaser settlement consideration 01:18:57.390 --> 01:19:02.609 Is that the same thing? Yes, your honor, okay. 01:19:02.609 --> 01:19:08.810 All right, so That's it With respect to the exculpation 01:19:08.810 --> 01:19:12.689 of the special directors, I think we should refer 01:19:12.689 --> 01:19:15.810 to Mr. Stein and Mr. Horton by name so there's 01:19:15.810 --> 01:19:21.390 no confusion. We'll make that revision, Your 01:19:21.390 --> 01:19:26.149 Honor. Okay. And then, finally, as it relates 01:19:26.149 --> 01:19:34.220 to the extended opt -out, I think it would probably 01:19:34.220 --> 01:19:37.680 be more appropriate to extend it for 75 days 01:19:37.680 --> 01:19:40.720 past both the end of the government shutdown 01:19:40.720 --> 01:19:47.619 as well as the holidays so that if you take it 01:19:47.619 --> 01:19:50.619 75 days, it goes to the end of January. I think 01:19:50.619 --> 01:19:56.380 with that, I would feel comfortable to the extent 01:19:56.380 --> 01:20:00.000 that there were any logistical issues that those 01:20:00.000 --> 01:20:04.170 have been resolved. We're happy to extend it, 01:20:04.170 --> 01:20:08.890 Your Honor. All right. So first of all, in terms 01:20:08.890 --> 01:20:13.229 of my ruling, I'm going to go ahead and grant 01:20:13.229 --> 01:20:16.390 final approval of the disclosure statement and 01:20:16.390 --> 01:20:20.829 confirm the plan. There are many pending motions 01:20:20.829 --> 01:20:25.689 in front of me filed by various individuals relating 01:20:25.689 --> 01:20:30.250 to requests to rescind amounts, to rescind contracts, 01:20:30.569 --> 01:20:34.479 to Those matters will be handled in the ordinary 01:20:34.479 --> 01:20:40.739 course and they're not impacted by this. Part 01:20:40.739 --> 01:20:44.500 of the issue, we had a hearing earlier this week 01:20:44.500 --> 01:20:51.100 where a consumer was objecting wanting to have 01:20:51.100 --> 01:20:56.180 his panels removed and basically the debtor has 01:20:56.180 --> 01:20:58.199 sold the business and there's a third party. 01:20:58.390 --> 01:21:01.449 who now owns those assets and has the ability 01:21:01.449 --> 01:21:05.369 to do that. So part of this is an issue of what 01:21:05.369 --> 01:21:08.149 relief I can grant. As long as that's not before 01:21:08.149 --> 01:21:11.430 me today, I'm not ruling on anything relating 01:21:11.430 --> 01:21:14.890 to the various motions that are in front of me. 01:21:14.930 --> 01:21:17.930 I'm really focused on the disclosure statement 01:21:17.930 --> 01:21:24.890 and the plan. And I do agree with Mr. Schartz. 01:21:25.869 --> 01:21:29.380 I often wondered... You know what road this case 01:21:29.380 --> 01:21:34.960 was going to take especially at the start but 01:21:34.960 --> 01:21:40.079 and I'm happy that we were able to Delay the 01:21:40.079 --> 01:21:42.779 confirmation hearing and end up with you know, 01:21:42.779 --> 01:21:46.020 substantially a substantial agreement among the 01:21:46.020 --> 01:21:52.739 parties as it relates to the remaining Objection 01:21:52.739 --> 01:21:58.760 by the US trustee number one There's always a 01:21:58.760 --> 01:22:04.979 question as to if ballots are returned undeliverable, 01:22:05.260 --> 01:22:09.039 what the effect of that is. And I'm not ruling 01:22:09.039 --> 01:22:12.000 on that today. To the extent somebody did not 01:22:12.000 --> 01:22:18.439 receive notice in a constitutional fashion, that 01:22:18.439 --> 01:22:21.199 matter isn't before me, and I'm not making a 01:22:21.199 --> 01:22:25.279 ruling with respect to that. As it relates to 01:22:25.279 --> 01:22:31.270 the scope of the 1125 -E exculpation. There's 01:22:31.270 --> 01:22:35.310 two responses. One, Ms. Raney indicated that 01:22:35.310 --> 01:22:41.189 it's only to the extent permitted by 1125 -E. 01:22:41.550 --> 01:22:44.970 And also the related party's definition is limited 01:22:44.970 --> 01:22:49.810 to anybody who would be liable in a derivative 01:22:49.810 --> 01:22:53.949 capacity through or liable as a result of the 01:22:53.949 --> 01:22:58.409 actions taken by the by the party that is named. 01:22:58.750 --> 01:23:02.210 So the related party is only liable if that party 01:23:02.210 --> 01:23:04.270 is there liable because of the actions taken 01:23:04.270 --> 01:23:08.350 by the other person. So in that sense, I think 01:23:08.350 --> 01:23:14.090 that the 1125E exclamation was appropriate. As 01:23:14.090 --> 01:23:17.630 it relates to the exclamation of the two independent 01:23:17.630 --> 01:23:20.489 directors, I do believe that they were acting 01:23:20.489 --> 01:23:25.699 in a fiduciary capacity. I think that under Highland 01:23:25.699 --> 01:23:31.140 Capital to the extent that a person is acting 01:23:31.140 --> 01:23:34.920 in an independent capacity that came in, performed 01:23:34.920 --> 01:23:38.359 a significant function in this case, and acted 01:23:38.359 --> 01:23:40.640 as a fiduciary, especially in light of the fact 01:23:40.640 --> 01:23:44.239 that, you know, the debtor's management went 01:23:44.239 --> 01:23:48.399 with the purchaser. I think that they, with respect 01:23:48.399 --> 01:23:51.399 to the limited time period that's covered by 01:23:53.039 --> 01:23:56.659 I think that those are appropriate. So on that 01:23:56.659 --> 01:24:02.520 basis, I'm going to overrule the trustee's objection. 01:24:03.619 --> 01:24:06.859 Finally, as it relates to the opt -out mechanism, 01:24:08.079 --> 01:24:11.800 I think that under the Fifth Circuit law, prior 01:24:11.800 --> 01:24:15.159 to Purdue, there was no thing as a non -consensual 01:24:15.159 --> 01:24:19.409 release. Here, you have a situation where The 01:24:19.409 --> 01:24:22.369 release is limited. It's been highly negotiated. 01:24:22.609 --> 01:24:26.789 There are various carve -outs. The better release 01:24:26.789 --> 01:24:31.229 is, again, limited to a very narrow period of 01:24:31.229 --> 01:24:38.289 time, you know, relating to the period after 01:24:38.289 --> 01:24:41.890 the confirmation. I'm sorry, after the petition, 01:24:42.090 --> 01:24:45.869 but prior to the effective date. I think the 01:24:45.869 --> 01:24:49.649 scope in there is appropriately limited. And 01:24:49.649 --> 01:24:54.029 I do believe that under the circumstances and 01:24:54.029 --> 01:24:57.529 the fact that you did have, you know, 543 people 01:24:57.529 --> 01:25:02.590 opt out and the extended opt -out period for 01:25:02.590 --> 01:25:07.250 75 days until January 26th, I think all of those 01:25:07.250 --> 01:25:11.270 measures indicate that the release was consensual, 01:25:11.470 --> 01:25:16.510 is consensual. and under Fifth Circuit case law 01:25:16.510 --> 01:25:20.229 is appropriate under the circumstances. This 01:25:20.229 --> 01:25:25.449 isn't a case where you're trying to get something 01:25:25.449 --> 01:25:28.130 by people. I mean, this has been highly negotiated. 01:25:28.550 --> 01:25:32.130 This is probably one of the more extensive release 01:25:32.130 --> 01:25:34.489 with various cutouts and different parties getting 01:25:34.489 --> 01:25:38.789 different things. And furthermore, the scope 01:25:38.789 --> 01:25:43.319 of what's not being released is significant and 01:25:43.319 --> 01:25:48.699 forms the basis of the committee resolution with 01:25:48.699 --> 01:25:51.800 the debtor. So under all of those circumstances, 01:25:51.899 --> 01:25:56.539 again, I'm going to overrule the trustee's objection 01:25:56.539 --> 01:26:00.260 with respect to the opt out mechanism for the 01:26:00.260 --> 01:26:05.220 third party release. And so with that, I think 01:26:05.220 --> 01:26:10.819 that I have... I've ruled on everything. Is there 01:26:10.819 --> 01:26:16.720 anything that I haven't ruled on? I think we're 01:26:16.720 --> 01:26:19.859 good, Your Honor. Thank you so much. OK. All 01:26:19.859 --> 01:26:25.779 right. I also had on the docket for today a motion 01:26:25.779 --> 01:26:29.260 to quash a 2004 examination. Is that still on 01:26:29.260 --> 01:26:37.220 the docket or wasn't on the agenda? All right. 01:26:38.140 --> 01:26:42.840 Mr. Sharpe, that was your motion, but we'll not 01:26:42.840 --> 01:26:47.760 worry about that. Is Mr. Shriver in the room 01:26:47.760 --> 01:26:50.340 in New York? To me, that was something you were 01:26:50.340 --> 01:26:53.119 dealing with. We can... Mr. Cone just popped 01:26:53.119 --> 01:26:56.020 on. Whenever you want to have that, if that's 01:26:56.020 --> 01:26:59.300 still viable and you want to have it heard, just 01:26:59.300 --> 01:27:04.239 reach out to Mr. Lodge. Okay. All right. Okay. 01:27:04.420 --> 01:27:08.460 So, Mr. Ortega, you raise your hand. Yes, your 01:27:08.460 --> 01:27:10.699 honor. It's been your take associate credit claim 01:27:10.699 --> 01:27:14.300 1473. I just want to confirm. So you're saying 01:27:14.300 --> 01:27:17.039 as far as the motion for sanctions and the stuff 01:27:17.039 --> 01:27:20.659 that I applied will be rolled on later. So I'll 01:27:20.659 --> 01:27:25.880 schedule a hearing and it will be ruled on at 01:27:25.880 --> 01:27:28.380 the time of the hearing. Okay, sir. I appreciate 01:27:28.380 --> 01:27:32.180 it. Thank you. No problem. Your honor. All right. 01:27:32.180 --> 01:27:35.880 If I could just one final matter. Yes, we have 01:27:36.199 --> 01:27:38.460 We have an extensivity motion that hasn't been 01:27:38.460 --> 01:27:41.239 granted yet. I think with today's rulings, we 01:27:41.239 --> 01:27:43.180 can officially say there won't be any opposition 01:27:43.180 --> 01:27:46.060 to it. And so with Your Honor's leave, we'll 01:27:46.060 --> 01:27:48.920 file a CNO on that motion following this hearing, 01:27:49.100 --> 01:27:50.840 and hopefully get that order entered. Right. 01:27:51.020 --> 01:27:53.859 OK. And also, with respect to the 14 -day stay, 01:27:54.020 --> 01:27:57.260 that's why I knew I was missing something. With 01:27:57.260 --> 01:28:00.359 respect to the 14 -day stay, I think in this 01:28:00.359 --> 01:28:04.539 case where You know, it did work with administrative 01:28:04.539 --> 01:28:08.220 insolvency. I think the quicker that you can 01:28:08.220 --> 01:28:13.260 stop the drain, the better. So I'm going to go 01:28:13.260 --> 01:28:19.939 ahead and wait to say I think that based on the 01:28:19.939 --> 01:28:22.500 evidence that was presented from the declarations 01:28:22.500 --> 01:28:25.939 of Mr. Alejandro, I think there's sufficient 01:28:25.939 --> 01:28:31.060 evidentiary basis in order to do that. Thank 01:28:31.060 --> 01:28:35.279 you. All right. All right, Mr. Esquivel. Mr. 01:28:35.420 --> 01:28:39.460 Esquivel. Thank you, Your Honor. Can you hear 01:28:39.460 --> 01:28:44.680 me? Yes, I can hear you. So in my case, you mentioned 01:28:44.680 --> 01:28:47.579 you're going to be ruling in a later date for 01:28:47.579 --> 01:28:49.800 those motions pending. You just want to make 01:28:49.800 --> 01:28:54.260 sure that if the client goes effective, those, 01:28:54.260 --> 01:29:02.210 you know, So if the plan goes effective, those 01:29:02.210 --> 01:29:05.550 issues where consumer cases in our contract are 01:29:05.550 --> 01:29:08.489 not going to leave us in a kind of unprotected. 01:29:08.670 --> 01:29:11.430 So that is going to make sure the fact that you 01:29:11.430 --> 01:29:15.449 rule today on the plan doesn't affect all of 01:29:15.449 --> 01:29:23.550 the consumers. The plan grants certain relief 01:29:23.550 --> 01:29:26.170 to the debtor in order to do that. There is no 01:29:26.170 --> 01:29:31.449 discharge in the plan. And with respect to this 01:29:31.449 --> 01:29:35.109 paragraph 131, it says, basically, notwithstanding 01:29:35.109 --> 01:29:39.010 anything to the contrary in the plan, any preposition 01:29:39.010 --> 01:29:41.909 obligations, regulatory determinations, or administrative 01:29:41.909 --> 01:29:45.029 enforcement relating to Puerto Rico consumer 01:29:45.029 --> 01:29:47.770 contracts shall not be extinguished or impaired 01:29:47.770 --> 01:29:51.550 or released. That's what he said. Thank you, 01:29:51.609 --> 01:29:54.390 Mr. Your Honor. So I'm located in New Jersey. 01:29:54.710 --> 01:29:58.460 I'm not sure if this is only... related to Puerto 01:29:58.460 --> 01:30:05.420 Rico in this case. So, yeah, so the order and 01:30:05.420 --> 01:30:10.279 perhaps the order, the sale order reserved all 01:30:10.279 --> 01:30:14.779 of the 365 old rights, which were the consumer 01:30:14.779 --> 01:30:20.640 rights under the consumer contracts. Whether, 01:30:20.640 --> 01:30:22.699 in your case, that's the case, I don't know. 01:30:22.699 --> 01:30:26.260 That's why I want to study it and read it out 01:30:26.260 --> 01:30:32.359 separately. without, you know, making a decision. 01:30:33.239 --> 01:30:37.680 Thank you so much. Appreciate it. Okay. Sorry, 01:30:37.760 --> 01:30:41.100 Mr. Sharps, anything further? Oh, Your Honor, 01:30:41.220 --> 01:30:43.619 thank you so much for your time. It's been a 01:30:43.619 --> 01:30:49.939 long road and we appreciate it. Okay, so go ahead 01:30:49.939 --> 01:30:52.779 and just resubmit the confirmation order with 01:30:52.779 --> 01:30:56.430 a red line. and as well as the C &O on the other 01:30:56.430 --> 01:30:59.869 order, on the exclusivity extension, and I'll 01:30:59.869 --> 01:31:02.369 review that and get that entered. All right. 01:31:02.729 --> 01:31:07.010 So we'll be in recess until the 9, 10, 30. Thank 01:31:07.010 --> 01:31:07.350 you all.